President Joe Biden's coronavirus relief proposal has cleared a major hurdle with Senate passage March 6 of a $1.9-trillion package that has a key change from the earlier House-passed version: a $10-billion capital fund for states.

The measure, the American Rescue Plan, which the Senate approved in a 50-49 party-line vote, has some changes from the version that the House cleared on Feb. 27.  Because it  differs from the House-passed measure, the new Senate bill must return to that chamber, which is expected to pass it. The proposal would then go to the White House for Biden's signature.

The most significant construction-related change, at least potentially, is the addition of $10 billion for states under a new "Coronavirus Capital Projects Fund." It is intended for "critical capital projects directly enabling work, education and health monitoring, including remote options" that respond to the COVID pandemic, the bill text says. It does not specify construction; nor does it rule construction out.

Brian Turmail, a spokesman for the Associated General Contractors of America, cautions that the potential list of types of eligible projects "is very large and does not ensure that this money will go to capital construction investments in infrastructure."

The bill does provide details of how the fund's dollars would be parceled out. It says each state, along with Puerto Rico and Washington, D.C., will get $100 million. Tribal governments will share another $100 million.

The other $4.6 billion will be distributed by formulas, with 50% of that sum based on state population, 25% based on a state's rural populations and 25% based on a state's relative population of those whose household income is below 150% of the poverty line.

In addition to the new capital fund, states, territories and tribal governments would receive $219.8 billion and cities, counties and other localities would get $120.2 billion.

$1B for Transit Projects

In addition to the new capital fund, the legislation has relatively little direct construction funding except for a $1.7-billion allocation for transit projects under the Federal Transit Administration's capital investment grants program.

Of the $1.7-billion allocation, $1.4 billion is earmarked for new fixed-guideway projects and “core capacity-improvement projects.” Eligible projects are those that received agency funding allocations in fiscal 2019 or 2020. The other $250 million would be allotted to projects in FTA’s “small starts” program.

The package's transportation section includes another $29 billion for transit agencies. That supplements $14 billion that they received in the coronavirus relief and appropriations bill enacted on Dec. 27. Most of that $29 billion new funding will go for payroll and other operating expenses.

Airport agencies would receive $8 billion for purposes such as operating expenses, debt service and aid to airport concessionaires.

Amtrak would get $1.7 billion to keep the railroad in full operation through Sept. 30,

School Facilities and Indoor Air

Elsewhere in the bill, "repairs and improvements" for K-12 school facilities would be one of a number of eligible uses for $128.6 billion in aid.

Another use would be "inspection, testing, maintenance, repair, replacement and upgrade projects" to improve schools' indoor air quality. That would include heating, ventilation and air conditioning systems, filtering, fans and window and door replacement, the bill states.

But schools also can use funds to reduce class size, presumably by adding teachers and other personnel, buying personal protective equipment and hiring support staff, according to the House Education and Labor Committee.

In another part of the bill, the Paycheck Protection Program of forgivable loans would receive a further $7.25 billion.

Also included is $500 million for low-income customers to assist in paying water and sewer bills.

Multi-employer Pension Provisions

The measure also includes sweeping changes in the struggling multi-employer pension program, which affects companies, workers and retirees in the unionized construction sector.

The key provision calls for an infusion from the government’s general fund to the Pension Benefit Guarantee Corp., which administers the federal pension-plan assistance program, to provide financial help to multi-employer plans judged to be in “critical and declining” condition in 2020, 2021 or 2022.

The Congressional Budget Office estimates the provision's cost at $86 billion. 

The AFL-CIO welcomed the multiemployer pension assistance but key Senate Republicans blasted it as a bailout.

Story updated on 3/8/2021 with corrected, higher funding numbers for transit and Amtrak.