The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27, 2020. The CARES Act established a $150 billion Coronavirus Relief Fund (Fund), through which the U.S. Department of Treasury (Treasury) will make direct payments to each state, eligible units of local government, the District of Columbia, U.S. Territories (the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands), and Tribal Governments. The direct payments can be used this year to help with state and local government expenses incurred in connection with the COVID-19 pandemic.
What expenses are eligible?
The CARES Act only permits direct payments from the Fund to cover those costs that (i) are necessary expenditures incurred due to the public health emergency with respect to COVID-19; (ii) were not accounted for in the budget most recently approved as of March 27, 2020 (the date the CARES Act was enacted) for the government entity; and (iii) were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. As further described below, the chief executive of the government entity will be required to certify that funds will only be used for these eligible costs.
How will direct payments from the Fund be allocated?
Amounts from the Fund will be allocated on the basis of population as provided in the CARES Act. The amount of the direct payment made to each state will be reduced by the amount of payments made to eligible local government units within the state that have applied for the direct payments as described below. Units of local government are eligible for the direct payments if they are a county, municipality, town, township, village, parish, borough, or other unit of general government below the state level with a population that exceeded 500,000 in 2019 according to the U.S. Census Bureau.
The amount of the direct payments to Tribal Governments will be determined by the Secretary of the Treasury through consultation with the Secretary of the Interior and Indian Tribes. Tribal Governments will provide certain data with their applications for direct payments to assist with this determination.
Information regarding the determination of eligibility for local government units, the calculation of population, and the maximum allocation for each state is available here.
A list of the eligible units of local government is available here.
What is the process to apply for direct payments from the Fund?
Payment information and the required supporting documents must be submitted by 11:59 p.m. EDT on April 17, 2020, here. If all of the required information is not submitted by the deadline, then the government entity may not receive payment from the Fund.
Eligible local governments must (i) submit a certification executed by the chief executive officer, which includes representations regarding the executing officer’s authority, an acknowledgement that Treasury will rely on the certification, and that the local government entity’s proposed use of the funds will only be used to cover eligible costs; (ii) provide general information, including taxpayer ID number, DUNS number, address, name and title of an authorized representative, and contact information; (iii) and provide information about the recipient government entity’s financial institution. The certification for Tribal Governments also requires certain Tribal data, including population, land base, employees, and total expenditures for the most recently completed fiscal year.
