Payments from the Coronavirus State & Local Recovery Fund: When Will the Money Arrive?

Earlier this month, we published a blog post on the recently enacted American Recovery Plan Act (ARPA) which provides over $673 billion to state and local governments in direct and targeted funds. But the question is- when do states and localities expect to receive the funds from the Coronavirus State and Local Recovery Fund? Here’s the breakdown on the timing:

Timeline for States

The U.S. Treasury Department is given 60 days from the enactment date (March 11, 2021) of ARPA to finalize guidance and regulations for states to follow in requesting, using, and filing reports to the Treasury for funds from the Coronavirus State Recovery Fund. 

After the Treasury Department issues its guidance and regulations, a state can file its certification request with the Treasury Department. The department then has up to 60 days to make a payment to the state. The Treasury Secretary has the authority to withhold up to 50 percent of a state’s payment for 12 months from the date a state filed its certification request. Funds must be used by a state no later than December 31, 2024, and unspent funds will revert to the federal government after that date.

Coronavirus Capital Project Fund

The Coronavirus Capital Projects Fund within ARPA appropriates $10 billion to the states to carry out critical capital projects directly enabling work, education, and health monitoring, including remote options in response to COVID-19. States can apply for grants from the Capital Project Fund after the Secretary establishes a process for applying for the funds. The Treasury Department was given 60 days from the enactment date to finalize the application process.

Timeline for Localities

District of Columbia 

The district will receive an amount of $755 million within 15 days of the enactment date. This amount brings the district up to the minimum amount ($1,250 billion) a state received in the CARES Act from 2020. . The remaining funds for the district will follow the process for states.

Territories

Same as states.

Tribal Governments

Tribal governments will receive their fund no later than 60 days after enactment.  

Local Governments

ARPA also included $130.2 billion in the Coronavirus Local Recovery Fund, which will be paid out in two tranches expected to be 50 percent each of the total allotment. The first tranche will be paid not later than 60 days after enactment. The second tranche shall be paid 12 months from the date when the locality received its first tranche. All funds must be spent by December 31, 2024, or the funds revert back to the federal government.

Local governments do not need to submit a certification request but must follow the same requirements for using the funds and reporting as states.

For a state-by-state breakdown of funding, including local governments, read our “ American Rescue Plan Act: $673 Billion for State and Local Governments” blog post here.