The state’s $2 billion share of unspent American Rescue Plan (ARP) relief funds can be allocated by lawmakers on the Interim Finance Committee (IFC) alone, according to a legal opinion from Legislative Counsel Bureau staff.

The opinion represented a stark departure from what lawmakers were told at an IFC meeting in August — that more than half of the funds would need to be appropriated by the full Legislature — and signals the state may not need to call a special session to spend the ARP relief dollars.

During the August meeting, representatives of the Governor’s Finance Office told legislators that $1.1 billion of unallocated ARP funds designated as “lost revenue,” revenue lost as a result of the COVID-19 pandemic, would need to be appropriated by the Legislature in a regular or special legislative session because the money had been transferred to the state’s general fund.

However, the legal opinion, presented by legislative counsel Bryan Fernley on Thursday, said that a bill passed during the 2021 session, along with a section of Nevada statutes, authorized the committee to spend the unappropriated funds.

That measure, SB459, authorizes the governor's office to expend $2.8 billion on “COVID-19 relief programs” in the 2021-22 fiscal year and $2.7 billion in the 2022-23 fiscal year — with COVID-19 relief programs funded by the “coronavirus state and local fiscal recovery funds” granted to the state through the ARP.

Another bill passed during the session, SB461, required the Governor’s Finance Office to transfer the relief funds determined to be “lost revenue” to the state general fund; however, Fernley said that the $1.1 billion in lost revenue is already authorized for expenditure by SB459, which is also known as the authorizations act.

Nevada originally received $2.7 billion in state general aid through the ARP, but lawmakers allocated nearly $700 million of those funds through several bills passed during the legislative session, including SB461 (which appropriated ​​$335 million to repay loans borrowed from the federal government to sustain the state’s unemployment fund), AB484 (which authorized the use of $54 million in ARP funds for upgrades to the state’s unemployment system) and AB495 (which allocated $200 million to the Department of Education to address learning loss in K-12 schools).

Those expenditures leave the state with roughly $2 billion of unallocated ARP funds to spend, of which $1.1 billion in lost revenue is now in a reserve budget category, after its transfer to the state general fund was reversed.

Committee Chair Sen. Chris Brooks (D-Las Vegas) questioned Fernley as to whether the Legislature would be needed to approve new programs funded through the ARP dollars because the legal opinion points to appropriating funds through work program revisions. However, Fernley said that the funds could still be used as long as they are moved into an existing state budget account.

“SB459 authorizes the expenditure of the entire amount, and that amount is in the budget account 1327 (which was originally set up by the CARES Act), and it could be transferred to other budget accounts through the work program revision process,” Fernley said.

LCB Legal Opinion on ARP fu... by Sean Golonka