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Insular Area Liquidity Act

Floor Speech

Date: Aug. 28, 2020
Location: Washington, DC

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Mr. SABLAN. Madam Speaker, today, I introduce the Insular Area Liquidity Act, which requires any department or agency of the federal government, awarding a grant to any of the four smaller insular areas, to provide at least 50 percent of the award amount up front in an advance payment as defined in 2 CFR 200.3. My bill will also require the awarding department or agency to provide enhanced grant management assistance and technical assistance to the recipients to assure the advanced funds are properly used.

Unlike most states, the insular areas have limited cash flow. Our districts generally rely heavily on a single economy, tourism, that is highly sensitive to natural disasters and the economic fallout that follows. When that happens, and even in the best of times, insular government have little or no fiscal cushion.

Of course, I am very grateful for the many grants the Marianas receives to shore up the limited resources of our islands and, of course, especially now to help respond to the coronavirus crisis. But many grants awarded require that the awardee spend their own capital up front to be reimbursed later.

One result is that federal funds are slow to be spent and the projects and programs those funds are intended to support wait to be implemented. The legislation I am introducing today addresses this problem by providing an advanced payment of at least 50 percent of any grant awarded. Projects and programs would be less subject to delay.

This advance award is not a new concept. Some federal grant programs already provide for an advance payment to recipients. The FEMA Public Assistance Grant program, to name one, under section 428 of the Robert T. Stafford Act, P.L. 93-288 provides a 100 percent advance on project cost estimates, thereby removing the burden of capital availability from the awardee.

In the Marianas, we are still recovering from the devastation caused by 2018 Super Typhoon Yutu. And now we have the coronavirus pandemic, which has ground our tourism reliant economy to a halt and left our government short of funds. But capital limitations are not unique to the Marianas--it is a challenge shared by all of the insular areas. That is why I introduce this bill today, alongside my colleagues Mr. San Nicolas, Ms. Plaskett, and Mrs. Radewagen. I urge all my colleagues to support this bipartisan legislation.

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