Federal Law Challenges by State Attorneys General Attorneys General Challenge “Tax Mandate” Portion of American Rescue Plan On March 11, 2021, President Joe Biden signed into law the $1.9 trillion “American Rescue Plan Act of 2021” that provided funding for numerous programs in response to the COVID-19 pandemic. The legislation provides the states billions of dollars. Under a provision of the plan known as the “Tax Mandate,” states are barred from using the money to “directly or indirectly” offset tax cuts or reduce taxes. Shortly after the law was enacted, Ohio Attorney General Dave Yost filed a preliminary injunction in federal court seeking to enjoin the provision. According to the complaint, the conditions contained in the federal legislation present the states with the option of either accepting the stimulus funds or rejecting the money and keeping “their sovereign authority to set tax policy.” The complaint alleges the provision violates the Spending Clause, Article I, § 8 c.1., of the U.S. Constitution. According to the complaint, while Congress has substantial powers to govern the nation directly, the U.S. Constitution does not “confer upon Congress the ability to require the States to govern according to Congress’ instructions.” The complaint further alleges that Congress exceeded its authority in passing the Tax Mandate and thus should be enjoined from enforcing the provision.