States that carried federal programs during the lapse are reimbursed
What the document says“If a State (or another Federal grantee) used State funds (or the grantee's non-Federal funds) to continue carrying out a Federal program or furloughed State employees (or the grantee's employees) whose compensation is advanced or reimbursed in whole or in part by the Federal Government-- (1) such furloughed employees shall be compensated at their standard rate of compensation for such period;”
Section 118 of division A covers states and other grantees that kept a federal program running on their own money during a lapse. Furloughed employees are to be paid their standard rate, the state is to be reimbursed with interest calculated under section 6503(d) of title 31, and the state may use federal program funds to reimburse itself. The authority applies to any lapse in fiscal year 2026 and only to the extent money is provided in appropriations Acts.
What the document actually says“If a State (or another Federal grantee) used State funds (or the grantee's non-Federal funds) to continue carrying out a Federal program or furloughed State employees (or the grantee's employees) whose compensation is advanced or reimbursed in whole or in part by the Federal Government-- (1) such furloughed employees shall be compensated at their standard rate of compensation for such period;”
A state may have used its own money to keep a federal program going. Its workers who were sent home get their normal pay.
Many federal programs are run by states. When federal money stopped, some states paid the bills. This says they get paid back with interest.
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