US Treasury Releases Updated Guidance on Coronavirus Relief Funding

June 1, 2020

The new guidance says that states should pass through federal coronavirus funding to local governments, and provides additional information on eligible uses for the funds.

The U.S. Department of the Treasury released an updated frequently asked questions (FAQs) document on May 28 about the Coronavirus Relief Fund. The document is a supplement to the Treasury’s April 22 guidance.

The updated FAQs, in addition to the initial guidance, provide valuable insight to local units of government preparing to address eligible unbudgeted COVID-19 costs with money from the Coronavirus Relief Fund that is likely to be distributed by the state. The $150 billion Coronavirus Relief Fund was created by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Fund distribution process still uncertain

Discussions are ongoing about how the funds should be distributed to local governments with a population of less than 500,000, which did not receive a direct distribution from Treasury. But the updated FAQs make clear that states should pass through federal funding to local governments of all sizes.

Cities should also note that Treasury continues to develop additional guidance on the funds. League of Minnesota Cities (LMC) staff are continuing to work with the National League of Cities and Treasury to ensure that cities have a clear understanding of eligible uses of the Coronavirus Relief Fund.

Seeking funds for all cities

The League continues to work with the Walz administration and key House and Senate members to ensure that cities of all sizes receive federal funds in a fair and equitable way. With the adjournment of the Legislature, the distribution of the funds to cities, counties, and townships could be defined by Gov. Walz with the advisory review by the Legislative Advisory Commission, which includes House and Senate leadership and the chairs of the Senate Finance and House Ways and Means committees, as well as chairs of the House and Senate committees of jurisdiction. Should the governor call a special session, the distribution formula could be enacted by the Legislature.

For more information

More information on the Coronavirus Relief Fund and any subsequent guidance documents can be accessed via the Treasury website.

If you have questions that are unanswered by the existing guidance and FAQ document, contact LMC staff members Daniel Lightfoot at dlightfoot@lmc.org or Gary Carlson at gcarlson@lmc.org.

For more background information about this topic, read a previous article.