Below, please find the first of two ARRA briefings, from Vice President Rhinehardt to members of university community. A pdf of the memo is also available for download.
GENERAL ADMINISTRATION POST OFFICE BOX 2688, CHAPEL HILL, NC 27515-2688 KIMREY W. RHINEHARDT Telephone: (919) 843-0381 FAX: (919) 962-5463 Email: firstname.lastname@example.org
Wednesday, February 18, 2009
To: President Erskine Bowles
General Administration Council
Norma Houston, UNC Tomorrow
Chief Financial Officers
Chief Research Officers
Federal Relations Officers
Other Interested Parties
From: Kimrey Rhinehardt
Vice President for Federal Relations
Re: The American Recovery and Reinvestment Act of 2009
Stimulus Implementation Briefing One
This memorandum intends to impart information about general aspects of the "American Recovery and Reinvestment Act of 2009" also known as the "Stimulus package." Some framework details are known, mostly gleaned from statutory language, however agency implementation details are still unclear. As agency implementation information is made public we will pass it along through your respective Councils. We will all hear rumored action by federal agencies, which mayor may not be accurate, that we will try to verify. Please feel free to share any information that you are hearing from colleagues across the country or from your association networks. We would like to pass along only verified information to enable us all to operate on credible and reliable instructions.
The Stimulus package totals $789.5 billion and contains investments in public works infrastructure; assistance to State and local governments; tax relief and assistance for families and businesses; and investments to address long-term challenges on health care, energy, and climate change. Significant funding is provided for research agencies, signaling that Congress sees such investment critical to building the long-term sustainability of our economy. Almost all Stimulus funds are available to expend between now and September 30, 2010 thus providing critical flexibility to federal agencies. Congress intends for stimulus funding to be "one-time" funding without any guarantee of future funding either for the federal agency or the grantee.
State Office of Economic Recovery and Investment
Yesterday, Governor Beverly Perdue appointed former state Secretary Dempsey Benton head of the state's new Office of Economic Recovery and Investment.
The Governor's Economic Recovery and Investment Office will:
On behalf of the University at large, either Norma Houston or I will communicate regularly with Dempsey Benton and as such if you have any questions for him or his office, please forward them to either of us. We should minimize unnecessary inquiry of him and his office.
Underlying Goals and Overlooked Requirements of the Act
Congress and the American taxpayer have clear intentions for each federal dollar appropriated by the Stimulus package. A federal recovery dollar must maintain its federal identity. While our state will assume management rights over the federal recovery dollar, the dollar is actually owned by the American taxpayers. Federal agencies charged with distributing the money will face unprecedented pressure and scrutiny from their Congressional benefactors, spending watchdog groups, the press and the public at large. Federal agencies will in turn transfer this same level of pressure and scrutiny to its contractors and grantees.
Expeditious Spending: Infrastructure investment funds should be spent on projects that can be initiated within 120 days of enactment. The Act requires that at least 50 percent of funds must be spent obligated within 120 days of enactment.
Job Creation: Recipients should use grant funds in a manner that maximizes job creation and economic benefit.
Construction: Laborers and mechanics employed by contractors and subcontractors must be paid in accordance with Davis-Bacon wages. American iron, steel and manufactured goods must be used for construction or modernization of a public building or public work. Exceptions to the Buy American provision exist (Sec. 1605).
Transparency: Under the Act, Congress created an oversight body known as the Recovery Act Accountability and Transparency Board to coordinate and conduct oversight of federal spending under the agreement to prevent waste, fraud and abuse. The Board is required to submit status reports to Congress. Further, the Act creates a Recovery Independent Advisory Panel to make recommendations to the Board on actions that the Board can take to reduce waste, fraud and abuse.
Recovery.gov: The Federal government must create a website for public and interagency information.
Governor's Certification for Infrastructure: The Governor of any state that accepts Recovery funding must post on a website that such infrastructure projects received full view and vetting by law and that the Governor accepts responsibility for the appropriate use of taxpayer funds. The posting must be linked to Recovery.gov.
Reporting: Each recipient of stimulus funds from a Federal agency must submit quarterly reports to the sponsoring agency details of how funds were used - including expected completion date, status of project, number of jobs created or retained detailed information on subcontracts or subgrants consistent with OMB requirements. Federal agencies must post reported information on Recovery.gov.
CEO and GAO review: Required to report how many jobs were created or saved on a quarterly basis to Congress.
Council of Economic Advisers reporting: Must report macro-level economic indicators associated with the recovery spending to Congress on a quarterly basis.
Inspector General review: Federal agency Inspectors General (IGs) must review concerns raised by the public about specific investments made with recovery funding. Any resulting audits performed or findings must be linked to Recovery.gov. IGs are granted full and immediate access to records of the contractor or grantee, any of its subcontractors or subgrantees, or any state and local agency administering such contract or grant that involve transactions relating to recovery funds.
Recovery Dollar Tracking: Treasury is directed to establish separate accounts for recovery dollars. Funds will not be commingled with regular order appropriations even if the funds are administered through existing programs.
State Whistleblower Protections: Language protects employees of State, local government or contractors who report mismanagement of recovery funds.
Special Contracting Provision: To the maximum extent possible, contracts awarded under the Act must be fixed-price through a competitive bidding process. Any waiver of this section provided will be posted on Recovery.gov.
Funding Sunset: September 30, 2010 unless stated in the appropriate section.
State Fiscal Stabilization Funding
The Stimulus package includes funding for states to use to mitigate cuts to education and other government programs and services. North Carolina should receive approximately $1.42 Billion in total for state fiscal stabilization. The statute is clear that 81.8% of the total state award must be used to restore state support to education at either the FY 2008 or FY .2009 levels whichever is greater. Distribution within the state is proportional to the relative shortfall of state support for each of the education sectors (DPI, NC Community Colleges and UNC). A recent North Carolina General Assembly Fiscal Research Division presentation estimates a $2-3 Billion state budget shortfall and shows the existing, but not final, Fiscal Year 2008-2009 reductions to state government:
|Public Schools (2%)||$159 Million|
|ONC System (6%)||$144 Million|
|Community Colleges (5-6%)||$45 Million|
|HHS (4%)||$213 Million|
|JPS (4- 5.5%)||$93 Million|
|General Government/NER (7%)||$63 Million|
|Capital/R&R (89%)||$177 Million|
Governor Perdue will receive the Stabilization funding as soon as she applies to the U.S. Department of Education and is approved for the funding. Governor Perdue has discretion over how much Stabilization funding to use in each state fiscal year. At this time it is unclear how she intends to use the funding to balance the Fiscal Year 2008-2009 budget or future budgets.
The remaining 18.2 percent can be used at the Governor's discretion for other government services, which may include financial assistance to education. While the original House and Senate bills included separate programs for modernization, repairs and renovations of higher education facilities, the final bill instead, included modernization and improvement projects for institutions of higher education as an allowable use for a portion of the 18.2 percent Stabilization funding. Funds cannot be used for new construction; maintenance costs; stadiums or athletic facilities; the purchase or maintenance of vehicles; or for facilities used for "sectarian instruction or religious worship."
Also within the Stabilization funding, $5 billion is reserved for competitive State Incentive Grants and Innovation Grants awarded by the Secretary of Education. The State Incentive Grants are grants to states that make significant progress toward addressing key areas such as equity in highly-qualified teacher distribution between high-poverty and low-poverty schools and establishing a longitudinal data system. The Innovation Grants will be awarded to K-12 school districts and state educational agencies that have made achievement gains in the key areas.
States receiving the funds must agree to maintain state support for education at least at the levels authorized and appropriated by the state in FY 2006 and address key areas, including complying with provisions set forth by No Child Left Behind, achieving equity in teacher distribution, and establishing a longitudinal data system as set forth by the America COMPETES Act. The Secretary of Education can waive the requirements related to maintenance of effort but only in certain statutory circumstances relating to K-12.
Any state receiving Stabilization funding must submit a yearly report to the Secretary of Education regarding the use of funds, how funds were distributed, the number of jobs saved or created, tax increases diverted, the State's progress in reducing inequities in the distribution of highly qualified teachers, tuition and fee increases for in-State students at public institutions of higher education during the period of receiving these funds, and the extent to which public institutions of higher education maintained, increased, or decreased enrollment of in-State students.
Student Financial Assistance
The Stimulus package includes $15.6 billion for the Pell Grant program and $200 million for the Federal Work Study program. The funds provided for Pell will increase the maximum award by $500. When combined with the mandatory funds (P.L. 110-84, College Cost Reduction Act funding) included for the 2009-20 I0 academic year, the maximum grant is $5,350. Funds will also be used to pay down the Pell shortfall. $60 million is included for student aid administration which is intended to assist the Department with transitioning what they anticipate will be a mass influx of institutions of higher education from the FFEL Program to the Direct Loan Program due to the instability of financial markets.
"American Opportunity" Tax Credit
For 2009 and 2010, the bill provides qualified taxpayers with a new "American Opportunity" tax credit of up to $2,500 of the cost of tuition and related expenses paid during the taxable year.
Taxpayers will receive a tax credit based on 100 percent of the first $2,000 of tuition and related expenses (including books) paid during the taxable year and 25 percent of the next $2,000 of tuition and related expenses paid during the taxable year. Forty percent of the credit is refundable.
Teacher Quality Enhancement Grants
The Stimulus package includes $100 million for Teacher Quality Enhancement Grants which are intended to fund programs that change the ways teachers are recruited, prepared, licensed, and supported. The goal of these grants is to support efforts to reduce shortages of qualified teachers in high-need school districts. These competitive grants support partnerships among teacher preparation programs and schools of arts and sciences at institutions of higher education, high-need local education agencies, high-need schools, and community partners.
Teacher Incentive Fund
$200,000,000 was appropriated in the Stimulus package to the Teacher Incentive Fund (TIF). TIF supports efforts to develop and implement performance-based teacher and principal compensation systems in high-need schools. This appropriation is double the appropriation for the program in Fiscal Year 2008.
Statewide Longitudinal Data Systems
The Stimulus package includes $250 million for the Institute of Education Sciences to develop statewide data systems. Because states must assure the federal government that they will create a data system consistent with the elements in the COMPETES Act, this funding is intended to assist states with the assurance. The statutory language permits post-secondary education to access these funds. Miles Lackey has been in touch with Tate Gould at IES to discuss funding opportunities for the University.
National Institutes of Health
The final bill provides $10.4 billion for the National Institutes of Health (NIH), to be spent by September 30, 2010.
The bill provides $8.2 billion to the Office of the Director. Of this amount, $7.4 billion is designated for transfer to the Institutes and Centers as well as the Common Fund in proportion to the appropriations otherwise made to such accounts for FY 2009. The Office of the Director retains $800 million, within which priority shall be placed on short-term grants that focus on specific scientific challenges, new research that expands the scope of ongoing projects, and research on public and international health priorities.
Mechanisms Under Consideration
If NIH were to fund new research project grants (which are typically four or five year grants) with stimulus dollars, the concern is that the agency would not have the resources to continue these proposals beginning in the third year of the grant without adversely affecting the entire grant portfolio. Therefore, alternative approaches being considered include:
The legislation provides $1.3 billion to the National Center for Research Resources (NCRR), with $1 billion for competitive awards for the construction and renovation of extramural research facilities and $300 million for shared instrumentation and other capital equipment. The remaining $500 million is to be used for construction and renovation of NIH intramural buildings. For the extramural construction and renovations funding, applicants do not have to provide assurances that sufficient funds will be available to meet the non-Federal share of the cost of constructing the facility. In addition, a statutory limit that the grant can't exceed 50 percent of the cost of construction is eliminated.
Comparative Effectiveness Research
The legislation also provides $1.1 billion for comparative effectiveness research and recommends that the money be spread among three entities: the Agency for Healthcare Research and Quality (AHRQ) would receive $700 million, of which $400 million would be transferred to the National Institutes of Health (NIH); and the Office of the Secretary at the Department of Health and Human Services (HHS) would receive $400 million, which is made available for the Secretary to allocate at his discretion. It is highly likely that much of this HHS money will be transferred to NIH to perform additional comparative effectiveness studies.
National Science Foundation
The final bill provides $3 billion for the programs at the National Science Foundation (NSF). The Fiscal Year 2008 NSF budget was $6.03 billion.
The final bill provides $2 billion for the NSF research directorates and offices. NSF is directed to use this funding to support all research divisions and to support advancements in supercomputing technology. In addition to the specific programs called out in the bill (see below), mechanisms likely to be used by the NSF to expend the funds include:
NSF has indicated that funding CAREER awards or other proposals from early investigators is likely to be a priority.
Major Research Instrumentation (MRI) Program
The final bill provides $300 million for the Major Research Instrumentation program. For reference, proposals were due on January 22 to the current MRI competition, which originally had approximately $115 million to allocate. It is not clear whether NSF will direct the full $300 million to providing additional funding for this round of proposals or will distribute it between this competition and next year's proposals.
Research Facilities Modernization Program
The final bill provides $200 million to restart an old NSF program to repair and renovate science and engineering research facilities at institutions of higher education and other research institutions. To implement this provision, NSF will have to prepare and issue a new solicitation. The size and uses of the potential awards under this program are not yet known (in the 1990's, awards were capped at $2 million and new construction was not supported).
Education and Human Resources
The final bill provides $100 million for three education programs. There are funds for two existing programs: the Robert Noyce Teacher Scholarship program ($60 million) and the Math and Science Partnerships program ($25 million). There is also $15 million to establish a new program to facilitate the creation or improvement of Professional Science Master's degree programs.
Major Research Equipment and Facilities Construction Projects
The final bill provides $400 million for Major Research Equipment and Facilities Construction Projects.
How Fast to Spend the Funding
While the House version of the stimulus would have required NSF to spend the research funding within 120 days, the final bill only requires NSF to provide Congress with a spending plan detailing its intended allocation of the funds within 60 days of the bill being signed. In addition, the deadline for spending the funds is September 30, 2010. This will provide NSF with significant flexibility in expending the funding. However, given the official policy goal of the bill-stimulating the economy-there will still be pressure on the agency to spend at least some of the funds sooner rather than later, and to spend the money on activities that can be connected to jobs (i.e. infrastructure projects).
NSF Inspector General
In addition to the above funds, the final bill includes $2 million over the next four years for the NSF Office of Inspector General for oversight and audit of the funds provided to NSF in this legislation.
Department of Energy
The final economic Stimulus package includes funding for the Department of Energy (DOE) Office of Science and a significant investment in the development of clean, renewable energy sources for America.
DOE Office of Science
A total of$1.6 billion is provided for the Office of Science, which is essentially the same as the House bill. There is no specific directive on the expenditure of these funds for research or on laboratory or scientific infrastructure. The final bill also includes $400 million in a separate account to establish the Advanced Research Projects Agency - Energy (ARPA-E) authorized in the America COMPETES Act (PL. 110069).
DOE Energy Programs
Responding to the call of President Obama, the Stimulus package includes a significant investment to develop new, clean, renewable energy sources to reduce the nation's dependence on foreign oil. The final bill includes approximately $30 billion for investments in applied research, loan guarantees and grants to develop new technologies in partnership with industry, and energy efficiency and conservation activities.
Universities and research institutions will be interested in the applied R&D funding in the bill, opportunities to train the energy workforce, and potential partnerships with industry to develop the new generation of renewable energy technologies.
DOE Energy Efficiency and Renewable Energy R&D
The final bill includes $2.5 billion for applied research, development, demonstration and deployment of energy efficiency and renewable energy technologies. Within this amount, $800 million is for biomass projects and $400 million is for geothermal activities and projects. Also within the available funds is an allocation of $50 million for DOE for research to increase the efficiency of information and communications technology and to improve standards.
DOE Fossil Energy R&D
The final bill includes $1 billion for Fossil Energy R&D programs. An additional $I.52 billion is approved for a competitive solicitation for a range of industrial carbon capture and energy efficiency improvement projects, including a small amount for innovative concepts for beneficial C02 reuse. To further the development of carbon capture and storage technologies, DOE will also receive $50 million for a competitive solicitation for site characterization activities in geologic formations; and $20 million for geologic sequestration training and research grants.
The final bill provides $4.5 billion for activities related to developing the smart electricity grid. Congress agrees to devote $100 million of these funds for worker training. This funding is a major new investment of federal funding that is likely to be focused on collaboration with industry and utilities, but which may also provide new opportunities for academic researchers.
Aid to Industry
Stimulus funding is also devoted to assist industry in developing advanced energy technologies, including $6 billion for the cost of guaranteed loans for innovative renewable technologies and transmission technologies and $2 billion for Advanced Battery Manufacturing Grants.
The final bill provides $400 million for transportation electrification grants to help develop electric vehicle technologies, and $300 million for Alternative Fuel Vehicles Pilot Grants.
State Energy Program
The act also stipulates that $3.1 billion will go toward the State Energy Program for additional grants that don't need to be matched with state funds, but the act only allows such grants for states that intend to adopt strict building energy codes and intend to provide utility incentives for energy efficiency measures. To help states implement the measures, a separate portion of the Stimulus package allocates $500 million to the Department of Labor to prepare workers for careers in energy efficiency and renewable energy. See pages 59, 81-85, and 147-148 of the act, as well as pages 24, 28, and 51 of the accompanying joint explanatory statement of the conference committee.
Energy Efficiency and Conservation Block Grant
Congress also approves $3.2 billion to fund a new Energy Efficiency and Conservation Block Grant (EECBG) program that will go to State, local, and tribal governments for energy efficiency and conservation projects. The formula was authorized in subtitle E of Title V in the Energy Independence and Security Act of 2007 (42 U.S.C. 17151 et seq.). Congress set aside $400 million of this funding for competitive grants. The purpose of the program shall be to assist eligible entities in implementing strategies:
National Aeronautics and Space Administration
The final package includes a total of$1 billion for the National Aeronautics and Space Administration (NASA). Of this, $400 million is dedicated to Science to accelerate the development of the tier 1 set of Earth science climate research missions recommended by the National Academies Decadal Survey and to increase NASA's supercomputing capabilities.
Additionally, the legislation includes $150 million for aeronautics for system-level research, development and demonstration activities related to aviation safety, environmental impact mitigation and the Next Generation Air Transportation System (NextGen).
Finally, the bill includes $400 million for exploration and $50 million for cross agency support primarily for NASA facilities damaged from hurricanes and other natural disasters in 2008. The bill directs NASA to submit a plan for spending the allocated funds to Congress within 60 days.
National Oceanic and Atmospheric Administration
The final stimulus bill includes $830 million for National Oceanic and Atmospheric Administration (NOAA) (not including an additional $6 million for the Office of Inspector General). Within this amount is $230 million for NOAA operations, research and facilities "to address a backlog of research, restoration, navigation, conservation and management activities," and $600 million in the procurement, acquisition and construction account for construction and repair of NOAA facilities, ships and equipment, to improve weather forecasting and to support satellite development. This construction funding includes $170 million for climate modeling and to establish climate data records.
National Institute of Standards and Technology
The final bill provides $580 million for the National Institute of Standards and Technology (NIST). Of this amount, $180 million is for the grant program established in 2008 that provides competitive awards for construction of research science buildings at colleges, universities, and other research organizations. This funding is to be split between competitions held in FY 2008 and FY 2009. There is also $220 million for NIST research programs, which may be used for intramural research, competitive grants, research fellowships, and equipment and supplies. The remainder of the funds is for repair and construction of facilities of NIST's intramural laboratories ($180 million). No funding was provided for the Manufacturing Extension Partnership or the Technology Innovation Program.
In addition to these funds, the legislation instructs the Department of Health and Human Services to transfer $20 million to NIST for standards and interoperability activities associated with health information technology. The bill includes an authorization for NIST to establish an extramural grant program for universities for Centers for Health Care Information Enterprise Integration (see the health IT section of this document), but it also instructs NIST to carry out intramural programs on health IT standards and testing. It is not clear if the $20 million will be used for the intramural or extramural NIST programs.
United States Geological Survey
Surveys, Investigations, and Research
The bill provides $140 million for equipment replacement and upgrades, including stream gages, and seismic and volcano monitoring systems; national map activities; repair, construction and restoration of facilities; and other deferred maintenance and improvement projects. It is unknown at this time how USGS will distribute these funds.
Department of Labor
Workforce Development and Training
Within the Department of Labor, $2.95 billion is provided for formula grants to the States for training and employment services. To facilitate increased training of individuals for high-demand occupations, the bill provides the authority for local workforce investment boards to contract with institutions of higher education and other eligible training providers.
The bill also includes $750 million for a program of competitive grants for worker training and placement in high growth and emerging industry sectors. Within the amount provided, $500 million is designated for projects that prepare workers for careers in energy efficiency and renewable energy. Priority for the funds should also be provided for training in health care, wireless and broadband deployment, advanced manufacturing and other high demand industry sectors identified by local workforce areas.
Health Information Technology Research and Education Programs
The final bill authorizes, but does not fund, research and education programs related to health information technology (IT) and health care information enterprise integration.
The National Institute of Standards and Technology (NIST), in consultation with NSF, is authorized to establish a grants program to institutions of higher education to establish Centers for Health Care Information Enterprise Integration. The centers would conduct research on the systems challenges to healthcare delivery and support the development and use of health IT and other complementary fields. The centers would promote multidisciplinary collaborations, technology transfer activities, and education and training of researchers and other professionals. Research areas would include: human-computer interfaces; software that improves interoperability; software dependability; measurement of the impact of information technologies on the quality and productivity of health care; health IT security and integrity; health information enterprise management; and health IT to reduce medical errors. There are no specific funding levels for this program provided in the legislation. However, the Department of Health and Human Services is directed to transfer $20 million to NIST for work in health IT; it is not clear if those funds will be used for NIST's intramural or extramural activities in this area.
The Department of Health and Human Services, in consultation with NSF, is authorized to establish a grant program to institutions of higher education to establish or expand medical health informatics education programs, including certification and undergraduate and master's degree programs for both health care and information technology students to ensure the rapid and effective utilization and development of health IT in the U.S. Activities that may be supported by the grants include: curricula development and revision; student recruitment and retention; equipment purchases; and bridge programs between community colleges and universities. Preference is to be given to grants for existing education and training programs and programs designed to be completed in less than six months. Again, no funding is explicitly provided for this program by the legislation.
US Department of Agriculture
The final bill provides $176 million for the Agricultural Research Service (ARS) to address critical deferred maintenance of aging laboratory and research infrastructure.
Department of Defense, Operation and Maintenance
To improve, repair, and modernize DOD facilities, restore and modernize real property to include barracks, and invest in energy efficiency of DOD facilities:
Marine: $113, 865,000
Air Force: $1,095,959,000
Department of Defense Energy Research and Demonstration Projects
The final bill provides $300 million for research, development, test and evaluation projects, including pilot projects, demonstrations and energy efficient manufacturing enhancements. Funds are for improvements in energy generation and efficiency, transmission, regulation, storage, and for use on military installations and within operational forces, to include research and development of energy from fuel cells, wind, solar, and other renewable energy sources to include biofuels and bioenergy. The funds are split equally between the Army, Navy, Air Force, and Defense-Wide Research, Development, Test and Evaluation accounts.
Environmental Protection Agency
The final stimulus bill includes a total of $7.22 billion for the Environmental Protection Agency (EPA), which will be used primarily for state infrastructure projects and cleanup activities. The legislation provides $6.4 billion for State and Tribal Assistance Grants, $600 million for the Superfund Remedial program and $200 million for the Leaking Underground Storage Tank Trust Fund Account.
E- Verify Program
The House e-Verify provision was dropped, so participation in e-Verify will not be required for entities that receive funding from this legislation.
Department of Homeland Security Science and Technology
No funding is provided.
Key Links for Additional Information
General Agency and White House Stimulus Information:
Dept. of Education Recovery Information: