Client Alert

On Tuesday, Feb. 17th, the President signed the Stimulus Bill -- H.R. 1, the American Recovery and Reinvestment Act -- into law. The legislation authorizes $575 billion in spending to provide aid to states and cities, funding for transportation and infrastructure projects, and expand the Medicaid program to cover more unemployed workers. It also includes $212 billion in personal and business tax breaks – for a total of $789 billion in spending and tax cuts.

The bill provides direct and indirect funding, tax benefits and other opportunities for certain industries and private businesses that are already engaged in -- or able to adopt their business practices and/or purposes to conform with -- the various activities and endeavors that receive preferential support under the bill.
The bill also provides direct and indirect funding to state and local governments via formula or competitive grants to subsidize and support specific activities by such governmental units. Thus, funding will also indirectly benefit private sector companies that currently -- or are willing to -- contract with or support state and local governments in the activities supported under the bill.

As a general matter, the Act gives preference to “quick start” activities so that 50 percent of the funds can be used for activities initiated no later than 120 days after the enactment of the bill and seeks to award formula grants to states and local governments no later than 30 days after the bill’s enactment, and competitive grants at the federal level no later than 90 days after enactment. The bill also establishes a “use it or lose it” requirement that would obligate those receiving funds to use at least 50 percent of the funds by the end of the first year and the remaining funds by the end of the second year. It also requires that 50 percent of the money for highway, aviation, transit and rail projects be obligated within 90 days. Such requirements could prompt additional opportunities for the private sector if the requirements are not met by some recipients and the funding is then redistributed among new recipients in May or June.

Potential applicants for Stimulus bill funds need to be cognizant that the federal government places numerous conditions on the recipients of the funds in many instances such as the establishment of “whistle blower” protections for non-federal employees who provide evidence of mismanagement, a requirement that all employers that receive contracts using funds directly or indirectly from the bill must pay their workers the prevailing wage under Davis-Bacon laws, and a requirement that all the iron, steel, and manufactured goods used in a project funded with Stimulus bill funds for the construction, alteration, maintenance, or repair of a public building or public work must be produced in the United States. In addition, there is a specific prohibition on using Stimulus bill funds for a casino or gambling establishment, aquarium, zoo, golf course or swimming pool.

Click here to read the full text of the client alert summarizing the private sector and local government funding opportunities and other economic benefits in the “Stimulus Bill.”

If you would like additional information on any of these items, please contact the Federal and State Government Affairs Team.

Womble Carlyle is an experienced and effective government affairs advocate in Washington, as well as North Carolina and Georgia. Our Government Affairs group includes members from both major political parties who previously held the following positions: four-term North Carolina Governor; eight-term U.S. Representative; Chief Justice of the North Carolina Supreme Court; General Counsel and Deputy General Counsel of the FEC; four-term North Carolina State Senator; Chief of Staff to the Co-Speaker of the N.C. House of Representatives; Chief Counsel to the United States House of Representatives Committee on Small Business; Chief of Staff to a U.S. Congresswoman; two Chiefs of Staff to United States Senators; and a General Counsel to U.S. Senate and House Leadership offices.

The Group lobbies Members of Congress, State Legislators, as well as Federal and State Executive Branches; offers representation in connection with campaign finance, gift, and lobbying laws; assists clients in securing appropriations; tracks legislative activities and assesses proposed legislation for opportunities and impacts on clients; drafts legislative language; builds coalitions and organizes grassroots campaigns; develops and maintains political action committees (including our own Womble PAC); creates and distributes direct mail; and prepares and presents testimony before state and federal regulatory agencies and legislative bodies. Combining our related skills with our proven reputation for successful outcomes, our state and federal lobbying teams address client concerns responsively and cost-effectively.