The American Rescue Plan Act, Section 9901—The Coronavirus State Fiscal Recovery Fund - EveryCRSReport.com

Summary

A Congressional Research Service Insight (IN11665) dated May 11, 2021, by Grant A. Driessen, Specialist in Public Finance, on the Coronavirus State Fiscal Recovery Fund created by Section 9901 of the American Rescue Plan Act of 2021. It states that the fund provides $195.3 billion to the 50 states and DC, $20 billion to tribal governments and $4.5 billion to the territories, with each state and DC receiving at least $1.25 billion from the state and local funds combined. Treasury guidance pays states in one payment where unemployment is more than two percentage points above February 2020 levels, and in two otherwise. Funds remain available until December 31, 2024, for COVID-19 response, premium pay to essential workers, lost revenue, and water, sewer or broadband infrastructure. A table lists the allocation for each state and territory.

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The American Rescue Plan Act, Section 9901—The Coronavirus State Fiscal Recovery Fund

May 11, 2021 IN11665

link to page 2

INSIGHTi

The American Rescue Plan Act, Section 9901—

The Coronavirus State Fiscal Recovery Fund

May 11, 2021

Section 9901 of the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) provides a total of $362

bil ion in general federal payments to state, local, tribal, and territorial governments, $220 bil ion of

which is directed to the Coronavirus State Fiscal Recovery Fund (CSFRF). Similar assistance was

provided through the $150 bil i on Coronavirus Relief Fund established in the CARES Act (P.L. 116-136) .

This Insight summarizes the assistance provided to the CSFRF, as established in Section 9901 of ARPA.

Al ocations sorted by state and territory are provided in Table 1 . Additional guidance on al ocations,

timing, and eligible uses are available at t he Treasury State and Local Assistance website . (ARPA also

created the Coronavirus Local Fiscal Recovery Fund (CLFRF), discussed in a companion Insight.)

Allocation Methodology

ARPA provided a total of $219.8 bil ion through the CSFRF, distributed differently across state,

territorial, and tribal governments:

 States and DC: $195.3 bil ion to the 50 states and the District of Columbia (DC), with

(1) $0.755 bil ion to DC (i.e., the difference between DC’s al ocation and the minimum al ocation

to the 50 states provided in the CARES Act);

(2) $25.5 bil ion distributed equal y across state governments ($0.5 bil ion each);

(3) $169.045 bil ion distributed to states (and DC) in proportion to their seasonal y adjusted

unemployed population from October through December 2020, as measured by t he Bureau of

Labor Statistics; and

(4) Adjustments to ensure that each state and DC receives a total of at least $1.25 bil ion from the

CSFRF and Coronavirus Local Fiscal Recovery Fund, a separate fund for local governments

established in Section 9901.

 Tribal Governments: $20 bil ion provided for tribal governments, with

(1) $1 bil ion al ocated equal y across al tribal governments; and

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(2) $19 bil ion al ocated to al tribal governments through a process to be determined by the

Secretary of the Treasury; and

 Territories: $4.5 bil ion set-aside for Puerto Rico, American Samoa, Guam, the

Commonwealth of Northern Mariana Islands, and the U.S. Virgin Islands, with

(1) $2.25 bil ion al ocated equal y across the five territories (0.45 bil ion each); and

(2) $2.25 bil ion al ocated based on relative population.

Timing

ARPA provided Treasury with the discretion to make CSFRF payments to states in one or two tranches,

based on state unemployment levels. Treasury release d guidance specifying that payments wil be made in

one instal ment for states with unemployment levels at the time of Treasury certification that are more

than two percentage points higher than February 2020 levels. (State governments must complete

certification, consisting of payment delivery instructions and an authorized representative signature,

through t he Treasury submission portal to receive CSFRF payments.) Al other states are to receive

payments in two instal ments, with al first payments made in May 2021. For states receiving two

tranches, the second tranche payments are required to be made no later than 12 months after Treasury

certifies the first round of payments. Treasury’s guidance also stated that payments to al territorial

governments wil be made in a single instal ment, also in May 2021. Payments to tribal governments are

to be made in two instal ments—May 2021 and June 2021—with the latter based on unemployment data.

Al payments are to remain available until December 31, 2024, with funded projects completed no later

than December 31, 2026. Amounts not spent or used for ineligible purposes must be repaid to Treasury.

Eligible Uses

ARPA specifies that funding provided through the CSFRF is general y only to be used to

 respond to the COVID-19 public health emergency and its negative economic impacts;

 provide premium pay to essential workers or grants to employers with essential workers;

 replace lost, delayed, or decreased revenue, relative to projections issued before January

27, 2020, reduced by the projected budgetary effect of certain tax cuts enacted after

March 3, 2021 (to prevent payments from offsetting the effect of such tax cuts); or

 make necessary investments in water, sewer, or broadband infrastructure.

CSFRF recipients may transfer funds to private nonprofit groups, special purpose units of state or local

governments, or public benefit corporations involved in the transportation of passengers or car go. Table 1

shows the total CSFRF payments provided to state, tribal, and territorial governments and the projected

number of instal ments that Treasury wil use to make payments.

Table 1. CSFRF Payments by State and Territory

(in bil ions of dol ars)

State

Total Allocation Projected # of Payments

Alabama

2.120

2

Alaska

1.012

2

American Samoa

0.479

1

Arizona

4.183

2

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State

Total Allocation Projected # of Payments

Arkansas

1.573

2

California

27.017

1

Colorado

3.829

1

Connecticut

2.812

1

Delaware

0.925

1

DC

1.802

1

Florida

8.817

2

Georgia

4.854

2

Guam

0.554

1

Hawai

1.642

1

Idaho

1.094

2

Il inois

8.128

1

Indiana

3.072

2

Iowa

1.481

2

Kansas

1.584

2

Kentucky

2.183

2

Louisiana

3.011

1

Maine

0.997

2

Maryland

3.717

1

Massachusetts

5.286

1

Michigan

6.540

2

Minnesota

2.833

2

Mississippi

1.806

2

Missouri

2.685

2

Montana

0.906

2

Nebraska

1.040

2

Nevada

2.739

1

New Hampshire

0.995

2

New Jersey

6.245

1

New Mexico

1.752

1

New York

12.745

1

North Carolina

5.439

2

North Dakota

1.008

1

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Northern Mariana Islands

0.482

1

Ohio

5.368

2

Oklahoma

1.870

2

Oregon

2.648

1

Pennsylvania

7.291

1

Puerto Rico

2.470

1

Rhode Island

1.131

1

South Carolina

2.499

1

South Dakota

0.974

2

Tennessee

3.726

2

Texas

15.814

1

U.S. Virgin Islands

0.515

1

Utah

1.378

2

Vermont

1.049

2

Virginia

4.294

1

Washington

4.428

2

West Virginia

1.355

2

Wisconsin

2.533

2

Wyoming

1.068

2

Tribal Governments

20.000

2

Total

219.800

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Source : U.S. Treasury.

Note: Items may not sum to total due to rounding.

Author Information

Grant A. Driessen

Specialist in Public Finance

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