Retirement Savings Plans,For Plan Sponsors,Custom

President Biden Signs $1.9 Trillion American Rescue Plan

March 11, 2021

$325 Billion in Direct Assistance for State and Local Governments

On March 11, 2021, President Biden signed into law the $1.9 Trillion American Rescue Plan Act of 2021. This legislation provides new fiscal recovery funds for state and local governments through the newly established Coronavirus State and Local Fiscal Recovery Funds program. Central to our mission, ICMA-RC advocated for the passage of this legislation on behalf of our clients and the communities you serve. As part of this effort, we provided an online tool allowing plan sponsors to connect with elected representatives in Congress to voice support for this additional relief to help keep first responders, health care workers, teachers, and essential service employees safely on the job and continuing their important work during the ongoing pandemic.

To mitigate the fiscal impact of the COVID-19 pandemic, the bill provides funding through December 31, 2024 allocated as follows:

  • $195 billion to states and the District of Columbia
  • $130 billion to cities, municipalities, and counties
  • $165 billion to schools, colleges, and universities (funding through September 30, 2023)

If a state’s combined allocation of state and local funding is less than the amount of funds received under the CARES Act, the difference will be paid to the state. This guarantees each state and the District of Columbia a minimum funding of $1.25 billion.

States and the District of Columbia are expected to receive funds within 60 days of filing the required Certification of Need with the U.S. Treasury Department. This new funding is eligible for broader uses than the CARES Act provided support and the Treasury Department is expected to issue guidance shortly to provide additional clarity on the allocation and use of funds as well as address any statutory ambiguity.  

Clients with questions about the legislation or available uses of funding may wish to consult with their legal counsel. Central to our mission, ICMA-RC will continue to monitor and advocate for legislation that supports our clients and participants. 

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