Cities and Counties


*Subject to federal agency allocation

Direct Assistance

The Stimulus Act offers over $11 billion in direct assistance to county and municipal governments. The most significant of these programs are:

Public Housing Capital Fund ($4.0 billion):To Public Housing Agencies (PHAs) for capital and management activities, including development, modernization and financing of public housing; the funds may not be used for luxury improvements or direct social services

Distance Learning and Telemedicine Program ($2.5 billion) - Provides user equipment that connects students and teachers or medical professionals and patients at separate sites

Rural Water and Waste Disposal System ($1.38 billion): For rural local drinking water and wastewater infrastructure to alleviate health hazards and promote orderly growth by meeting the need for new and improved facilities

Rural Community Facilities Direct Loans Program ($130 million): Loans to rural cities and towns for essential community facilities projects such as patrol cars, pumper trucks, police surveillance equipment, city hall renovations, wood chippers, furniture, fixtures and equipment, garbage trucks, tractors and mowers

Energy Efficiency and Conservation Block Grants ($3.2 billion): For implementing strategies to reduce fossil fuel and energy use

Bond Restructuring & Tax Credits

The Stimulus Act includes several provisions to improve the fiscal situation of state and local governments. Most of these provisions regard tax relief on bond funding. The key changes are temporary and are as follows:

  • Suspends certain limitations on the tax deduction allowed to financial institutions for interest expenses related to investments in tax-exempt bonds, exempts interest earned on tax-exempt private activity bonds from the alternative minimum tax
  • Allows a new tax credit for investment in bonds for the construction, rehabilitation, or repair of or land acquisition for public school facilities
  • Increases the issuance limitation for qualified zone academy bonds
  • Allows a new tax credit for investment in recovery zone economic development and recovery zone facility bonds issued
  • Repeals the 3% withholding requirement on payments by federal, state, or local governmental entities to individuals who provide property or services to such entities
  • Extends the tax credit for the production of electricity from wind facilities and from other renewable facilities
  • Increases the limitation amount on the issuance of new clean renewable energy bonds and qualified energy conservation bonds



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