---
kind: "section"
citation: "42 U.S.C. § 806"
title: "42"
title_heading: "The Public Health and Welfare"
number: "806"
heading: "Rescission of funds declined by States, territories, or other governmental entities"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/806"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter VI — Coronavirus Relief, Fiscal Recovery, and Critical Capital Projects Funds"
---

# §806. Rescission of funds declined by States, territories, or other governmental entities

- (a) **Rescission—**
  - (1) **In general—** Subject to paragraphs [(2)](#a-2) and [(3)](#a-3), if a [State](/usc/42/619.md?p=5), [territory](/usc/42/701.md?p=c-5-C), or other governmental entity provides notice to the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury in the manner provided by the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury that the [State](/usc/42/619.md?p=5), [territory](/usc/42/701.md?p=c-5-C), or other governmental entity intends to decline all or a portion of the amounts that are to be awarded to the [State](/usc/42/619.md?p=5), [territory](/usc/42/701.md?p=c-5-C), or other governmental entity from funds appropriated under this subchapter, an amount equal to the unaccepted amounts or portion of such amounts allocated by the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury as of the date of such notice that would have been awarded to the [State](/usc/42/619.md?p=5), [territory](/usc/42/701.md?p=c-5-C), or other governmental entity shall be rescinded from the applicable appropriation account.
  - (2) **Exclusion—** [Paragraph (1)](#a-1) shall not apply with respect to funds that are to be paid to a [State](/usc/42/619.md?p=5) under [section 803 of this title](/usc/42/803.md) for distribution to nonentitlement units of local government.
  - (3) **Rules of construction—** [Paragraph (1)](#a-1) shall not be construed as—
    - (A) preventing a sub-[State](/usc/42/619.md?p=5) governmental entity, [including](/usc/42/1301.md?p=b) a nonentitlement unit of local government, from notifying the [Secretary](/usc/42/1301.md?p=a-6) of the Treasury that the sub-[State](/usc/42/619.md?p=5) governmental entity intends to decline all or a portion of the amounts that a [State](/usc/42/619.md?p=5) may distribute to the entity from funds appropriated under this subchapter; or
    - (B) allowing a [State](/usc/42/619.md?p=5) to prohibit or otherwise prevent a sub-[State](/usc/42/619.md?p=5) governmental entity from providing such a notice.
- (b) **Use for deficit reduction—** Amounts rescinded under [subsection (a)](#a) shall be deposited in the general fund of the Treasury for the sole purpose of deficit reduction.
- (c) **State or other governmental entity defined—** In this section, the term “[State](/usc/42/619.md?p=5), [territory](/usc/42/701.md?p=c-5-C), or other governmental entity” means any entity to which a payment may be made directly to the entity under this subchapter other than a Tribal government, as defined in sections [801(g)](/usc/42/801.md?p=g), [802(g)](/usc/42/802.md?p=g), and [804(d)](/usc/42/804.md?p=d) of this title, and an eligible Tribal government, as defined in [section 805(f) of this title](/usc/42/805.md?p=f).

## Source credit

(Aug. 14, 1935, ch. 531, title VI, § 606, as added Pub. L. 117–328, div. LL, § 105, Dec. 29, 2022, 136 Stat. 6105.)