I 

117TH CONGRESS 

1ST SESSION H. R. 2189 

To eliminate the prohibition on States and territories receiving Coronavirus 

State Fiscal Recovery funds from lowering taxes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 26, 2021 

Mr. BRADY (for himself, Mr. COMER, Mr. SMITH of Missouri, Mrs. WALORSKI, 

Mr. ARRINGTON, Mr. JORDAN, Mr. C. SCOTT FRANKLIN of Florida, Mr. 

ESTES, Mr. NUNES, Mr. SCHWEIKERT, Mr. WENSTRUP, Mr. HERN, Ms. 

HERRELL, Mr. BIGGS, Mr. GOSAR, Mr. KELLER, Ms. FOXX, Mr. HIGGINS of Louisiana, Mr. HICE of Georgia, Mr. CLOUD, Mr. SESSIONS, Mr. 

GROTHMAN, Mr. LATURNER, and Mr. GIBBS) introduced the following 

bill; which was referred to the Committee on Ways and Means, and in 

addition to the Committee on Oversight and Reform, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To eliminate the prohibition on States and territories receiving Coronavirus State Fiscal Recovery funds from lowering taxes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘State Tax Freedom 

5 Act’’. 


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•HR 2189 IH

1 SEC. 2. REFUNDS TO OFFSET CORONAVIRUS STATE FISCAL 

2 RECOVERY FUNDS ALREADY REPAID BY REA3 SON LOWERING TAXES. 

4 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

5 Internal Revenue Code of 1986 is amended by inserting 

6 after section 6423 the following new section: 

7 ‘‘SEC. 6424. REFUNDS TO STATES TO OFFSET CERTAIN RE8 QUIRED REPAYMENTS OF CORONAVIRUS 

9 STATE FISCAL RECOVERY FUNDS. 

10 ‘‘(a) IN GENERAL.—As soon as practicable after any 

11 specified State pays any specified repayment, the Sec12 retary shall make a payment to such specified State in 

13 an amount equal to such specified repayment. 

14 ‘‘(b) SPECIFIED REPAYMENT.—For purposes of this 

15 section, the term ‘specified repayment’ means any repay16 ment required to be made under subsection (e) of section 

17 602 of the Social Security Act by reason of subsection 

18 (c)(2)(A) thereof. 

19 ‘‘(c) SPECIFIED STATE.—The term ‘specified State’ 

20 means any State, territory, or Tribal government which 

21 is required to make to any specified repayment. 

22 ‘‘(d) OTHER TERMS.—The terms ‘State’, ‘territory’, 

23 and ‘Tribal government’ shall have the same respective 

24 meanings as when used in section 602 of the Social Secu25 rity Act. 


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•HR 2189 IH

1 ‘‘(e) TREATMENT OF PAYMENTS.—For purposes of 

2 section 1324 of title 31, United States Code, the payments 

3 under this subsection shall be treated in the same manner 

4 as a refund due from a credit provision referred to in sub5 section (b)(2) of such section.’’. 

6 (b) CLERICAL AMENDMENT.—The table of sections 

7 for subchapter B of chapter 65 of such Code is amended 

8 by inserting after the item relating to section 6423 the 

9 following new item: 

‘‘Sec. 6424. Refunds to States to offset certain required repayments of 

coronavirus State and local fiscal recovery funds.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to repayments paid after the date 

12 of the enactment of the American Rescue Plan Act of 

13 2021. 

14 SEC. 3. ELIMINATION OF PROHIBITION ON STATES RECEIV15 ING CORONAVIRUS STATE FISCAL RECOVERY 

16 FUNDS FROM LOWERING TAXES. 

17 (a) IN GENERAL.—Paragraph (2) of section 602(c) 

18 of the Social Security Act, as added by section 9901 of 

19 the American Rescue Plan Act of 2021, is amended to 

20 read as follows: 

21 ‘‘(2) FURTHER RESTRICTION ON USE OF

22 FUNDS.—No State or territory may use funds made 

23 available under this section for deposit into any pen24 sion fund.’’. 


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•HR 2189 IH

1 (b) CONFORMING AMENDMENTS.—Section 602 of 

2 such Act is further amended— 

3 (1) in subsection (d)(2)(A), by striking ‘‘, in4 cluding, in the case of a State or a territory, all 

5 modifications to the State’s or territory’s tax rev6 enue sources during the covered period’’; 

7 (2) in subsection (e), by striking ‘‘such sub8 section,’’ and all that follows through the period and 

9 inserting ‘‘such subsection.’’; and 

10 (3) in subsection (g)— 

11 (A) by striking paragraph (1); and 

12 (B) by redesignating paragraphs (2) 

13 through (7) as paragraphs (1) through (6), re14 spectively. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply with respect to repayments which 

17 would (but for such amendments) be required to be paid 

18 after the date of the enactment of this Act. 

Æ 


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