The CARES Act was recently signed into law and includes $150 billion Coronavirus Relief Fund for expenditures incurred due to this public health emergency. Below are some FAQs regarding this fund.
Q: How will the $150 billion Coronavirus Relief Fund for states and local government be allocated?
A: The Coronavirus Relief Fund (Sec. 5001) is a program created under the Department of the Treasury to provide funding to States, Tribes, and localities to offset lost revenue as a result of the coronavirus public health emergency. The bill provides an appropriation of $150 billion to be distributed by formula based on population. Eligible local governments may apply directly to the Treasury for funding and amounts paid to a state will be reduced accordingly.
Q: Who is eligible to apply and receive funding?
A: States, eligible local governments, Tribal governments, DC, and the territories.
Q: How is funding distributed?
A: Funding is paid based on a state share of the total population, subtracting any amounts paid to local governments.
Q: What is the timing for distributing funds to states?
A: Funds must be paid within 30 days of enactment.
Q: How is funding allocated to states?
A: State receive an amount equal to their relative population, deducting any amount that may have been paid to units of local government within the state who applied for funding independent of the state.
Q: What criteria is used to determine if local governments can apply?
A: A local government means any county, municipality, town, or other unit of general government with a population greater than 500,000. Smaller units of local government will need to work with their states to access funding.
Q: How much can local governments receive if they apply directly?
A: In no event will the total amount allocated directly to local units of government exceed 45% of the state’s allocation. A local government may receive 45 percent of the amount provided to the state times its relative population to the state.
Q: How is population determined?
A: Population will be determined by the most recent year for which data is available from the Bureau of the Census. Census updates population data annually between decennial censuses. The Treasury Department is still determining whether it will use 2018 or 2019 data since the 2019 update is not yet complete.
Q: What can funds be used for?
A: Funds may only be used to cover the costs associated with necessary expenses incurred as a result of the coronavirus diseases 2019 public health emergency, not accounted for in the most recently approved state budget, for calendar year 2020. The fungibility of certain aspects of public budgeting and the general sorts of revenue shortfalls that are expected in the current economic climate makes it unclear how restrictive those limitations will be in practice.