What’s in Store for the 2021 First Special Session?

May 14, 2021

On Monday, May 10th, 2021 the United States Treasury released additional guidance related to the American Rescue Plan Act (ARPA). While there are still many unknowns, we now know:

1. Utah will receive its state allocation in two 50 percent tranches, with half arriving this May and the remaining in May 2022.

2. Which industries can be considered “impacted” by the pandemic, for the purposes of receiving aid from these funds.  Tourism, travel, and hospitality industries are considered impacted, as well as other industries that have experienced comparable negative economic impacts from the pandemic. The guidance gives the example of the revenue decline of 24 percent and the employment decline of 17 percent nationally for the leisure and hospitality industry, as a benchmark for whether other industries might be considered “impacted” and thus eligible to receive assistance from ARPA funds.

3. How state revenue loss should be calculated to determine the extent of which ARPA funds may be used for revenue replacement. Utah will calculate a baseline for anticipated pre-pandemic revenue using fiscal year (FY) 2019 as the starting point and applying a growth adjustment of the greater of 4.1 percent per year or Utah’s average annual general revenue growth rate from FY 2016 to FY 2019. This baseline will be compared to actual revenue collections, and the difference may be considered revenue loss, and thus be filled using ARPA funds.

On Wednesday, May 19th, the Legislature expects to convene for a Special Session in which the state will formally accept these ARPA grant funds from the Federal Government. While total allocations have not been finalized, initial estimates are that Utah will have $1.65 billion to appropriate under both the State Fiscal Relief Fund and the Coronavirus Capital Projects Fund. Of that amount, only a portion will be appropriated during the Special Session, for the State’s most pressing needs. The Utah Legislature will spend the interim deciding on the best uses of ARPA funds for the state, waiting for the 2022 General Session to distribute remaining ARPA funding, once final allocations and guidance have been issued. The Executive Appropriations Committee has drafted a menu of allocations that the state can use to guide spending of this massive fiscal stimulus package on permissible uses.

Update 5/20/2021: During the 2021 First Special Sesssion, the Legislature passed Senate Bill 1001 Appropriations Adjustments, which appropriated funding from the American Recovery Plan Act (among other things). An index of S.B.1001’s General and Education Fund, ARPA and Utah Capital Investment Restricted Account adjustment is available here.