Treasury’s Covid-19 Aid Restrictions Win Is Tested on Appeal

A federal appeals court on Thursday explored whether to remand a state’s challenge of federal restrictions on how to spend $350 billion in Covid-19 aid back to the U.S District Court that dismissed it.

Last year, district Judge Diane Humetewa ruled Arizona could not show how its been harmed by the U.S. Treasury Department’s prohibition on states using American Rescue Plan Act funding to “directly or indirectly” offset revenue lost from a tax cut. Arizona is one of more than a dozen Republican-led states suing Treasury over guidance they say is ambiguous and violates anti-commandeering and spending clauses of the ...