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Abstract: Sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 (the “Act”), Pub. L. No. 117-2 (Mar. 11, 2021) authorizes the Coronavirus State Fiscal Recovery Fund (CSFRF) and Coronavirus Local Fiscal Recovery Fund (CLFRF) respectively (referred to as the “Coronavirus State and Local Fiscal Recovery Funds” or “SLFRF”), which provides $350 billion in total funding to Treasury to make payments generally to States (defined to include the District of Columbia), U.S. Territories (defined to include, Puerto Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, and American Samoa), Tribes, Metropolitan cities, Counties, Consolidated Governments, and Nonentitlement units of local government (through States) (collectively the “eligible entities”) to respond to the COVID-19 public health emergency or its negative economic impact, including provide assistance to households, small business, nonprofits, and impacted industries, such as tourism, travel, and hospitality; respond to workers performing essential work during the COVID-19 pandemic by providing premium pay to eligible workers of the State, territory, tribal government, metropolitan city, county, or nonentitlement units of local government performing essential work or by providing grants to eligible employers that have eligible workers; provide government services, to the extent COVID-19 caused a reduction of revenues collected in the most recent full fiscal year of the State, territory, tribal government, metropolitan city, county, or nonentitlement units of local government; or make necessary investments in water, sewer, or broadband infrastructure. Section 602(b) of the Act prescribes that $219.8 billion must be allocated as follows: (1) $4.5 billion reserved for making payments to the U.S. Territories; (2) $20 billion reserved for making payments to Tribal governments; and (3) $195.3 billion reserved for making payments to the 50 States and the District of Columbia. Section 603(b) of the Act prescribes that $130.2 billion must be allocated as follows: (1) $45.57 billion reserved for making payments to Metropolitan cities; (2) $19.53 billion reserved for making payments to States for distribution to Nonentitlement units of local government; and (3) $65.1 billion reserved for making payments to Counties. A unit of general local government that has formed a consolidated government or is geographically (in full or in part) within the boundaries of another unit of general local government may receive a distribution from the funds reserved for making payment to a metropolitan city, nonentitlement unit of local government or county, as applicable based on the respective formula for such allocation to a metropolitan city, nonentitlement unit of local government or county. Section 602(b)(6)(A)(i) provides that Treasury shall make payments to States and U.S. Territories no later than 60 days after receipt of the required certification. Payments to tribal governments are to be distributed no later than 60 days after March 11, 2021 pursuant to section 602(b)(6)(B). Section 603(b)(7)(A) provides that Treasury shall make the first tranche of payments to metropolitan cities, counties, and States for distribution to nonentitlement units of local government no later than 60 days after March 11, 2021.

Emergency Justfication: Sections 602 and 603 of the Social Security Act (the “Act”), as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 (Mar. 11, 2021) authorizes the Coronavirus State Fiscal Recovery Fund (“CSFRF”) and Coronavirus Local Fiscal Recovery Fund (“CLFRF”) respectively (referred to as the “Coronavirus State and Local Fiscal Recovery Funds” or “SLFRF”). The Coronavirus State and Local Fiscal Recovery Funds provide $350 billion in total funding for the Department of the Treasury (“Treasury”) to make payments to States (defined to include the District of Columbia), U.S. Territories (defined to include Puerto Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, and American Samoa), Tribes, Metropolitan cities, Counties, Consolidated Governments, and (through States) Nonentitlement units of local government (collectively the “eligible entities”) to (1) respond to the COVID-19 public health emergency or its negative economic impacts, including providing assistance to households, small business, nonprofits, and impacted industries, such as tourism, travel, and hospitality; (2) respond to workers performing essential work during the COVID-19 pandemic by providing premium pay to eligible workers of the State, U.S. Territory, Tribal government, Metropolitan city, County, or Nonentitlement units of local government who are performing essential work or by providing grants to eligible employers that have eligible workers; (3) provide of government services, to the extent COVID-19 caused a reduction of revenues collected in the most recent full fiscal year of the State, U.S. Territory, Tribal government, Metropolitan city, County, or Nonentitlement units of local government; or (4) make necessary investments in water, sewer, or broadband infrastructure. Section 602(b) of the Act prescribes that $219.8 billion must be allocated as follows: (1) $4.5 billion reserved for making payments to the U.S. Territories; (2) $20 billion reserved for making payments to Tribal governments; and (3) $195.3 billion reserved for making payments to the 50 States and the District of Columbia. Section 603(b) of the Act prescribes that $130.2 billion must be allocated as follows: (1) $45.57 billion reserved for making payments to Metropolitan cities; (2) $19.53 billion reserved for making payments to States for distribution to Nonentitlement units of local government; and (3) $65.1 billion reserved for making payments to Counties. A unit of general local government that has formed a consolidated government or is geographically (in full or in part) within the boundaries of another unit of general local government may receive a distribution from the funds reserved for making payment to a Metropolitan city, Nonentitlement unit of local government, or county, as applicable based on the respective formula for such allocation to a Metropolitan city, Nonentitlement unit of local government, or County. Section 602(b)(6)(A)(i) provides that, to the extent practicable, Treasury shall make payments to States and U.S. Territories no later than 60 days after receipt of the required certification. Payments to Tribal governments are to be distributed, to the extent practicable, no later than 60 days after March 11, 2021, pursuant to section 602(b)(6)(B). Section 603(b)(7)(A) provides that, to the extent practicable, Treasury shall make the first tranche of payments to Metropolitan cities, Counties, and States for distribution to Nonentitlement units of local government no later than 60 days after March 11, 2021.

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