Coronavirus State and Local Fiscal Recovery Funds 2021 Interim Final Rule: Frequently Asked Questions
Summary
Frequently Asked Questions on the Coronavirus State and Local Fiscal Recovery Funds 2021 Interim Final Rule, issued by Treasury and marked as of July 2023 and as of August 2023. An August 2023 update states that the 2022 final rule went into effect on April 1, 2022, that Treasury has released supporting documents including Final Rule FAQs and an Affordable Housing How-To Guide, and that in August 2023 Treasury released an interim final rule implementing the new eligible uses added by the Consolidated Appropriations Act, 2023. A January 2022 update notes that these FAQs pertain to the Interim Final Rule in effect until April 1, 2022. The document lists the questions added on each date beginning 5/27/21, and ends with a chart of tax categories included in and excluded from the interim final rule definition of general revenue.
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“Coronavirus State and Local Fiscal Recovery Funds 2021 Interim Final Rule: Frequently Asked Questions.”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-the-treasury-interim-final-rule-faqs-main-home-treasury-gov-db56801293/
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AS OF JULY 2023
Coronavirus State and Local Fiscal Recovery Funds
2021 Interim Final Rule: Frequently Asked Questions
AS OF AUGUST 2023
Update (August 2023): The 2022 final rule went into effect on April 1, 2022, and
Treasury has released many supporting documents for recipients. Such documents
include the Overview of the Final Rule, Final Rule FAQs, FAQ Supplement for NEUs,
FAQs Issued by the IRS, and the Affordable Housing How-To Guide. The 2022 Final
Rule FAQs include updated FAQs originally included in this document, as well as
additional FAQs. Recipients are encouraged to consult these documents.
Furthermore, in August 2023, Treasury released an interim final rule that implements
the new eligible uses added to the SLFRF program by the Consolidated
Appropriations Act, 2023. Treasury anticipates issuing FAQs for the 2023 interim
final rule at a later date. Recipients may find helpful the Overview of the 2023 Interim
Final Rule. As noted below, the FAQs in this document pertain to the 2021 interim
final rule.
Update (January 2022): The FAQs in this document pertain to the Interim Final Rule
(IFR), which is in effect until April 1, 2022. In addition to this document, recipients
are encouraged to consult the Statement Regarding Compliance with the Coronavirus
State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule, which
provides guidance on use of funds until the Final Rule takes effect.
Treasury anticipates issuing FAQs for the Final Rule at a later date. Recipients may
find helpful the Overview of the Final Rule, which provides a summary of major
provision of the Final Rule for informational purposes.
This document contains answers to frequently asked questions regarding the Interim Final Rule
of the Coronavirus State and Local Fiscal Recovery Funds (CSFRF / CLFRF, or Fiscal Recovery
Funds). Treasury will be updating this document periodically in response to questions received
from stakeholders. Recipients and stakeholders should consult the Interim Final Rule for
additional information.
• For overall information about the program, including information on requesting funding,
please see https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-
and-tribal-governments
• For general questions about CSFRF / CLFRF, please email SLFRP@treasury.gov
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Questions added 5/27/21: 1.5, 1.6, 2.13, 2.14, 2.15, 3.9, 4.5, 4.6, 10.3, 10.4 (noted with “[5/27]”)
Questions added 6/8/21: 2.16, 3.10, 3.11, 3.12, 4.7, 6.7, 8.2, 9.4, 9.5, 10.5 (noted with “[6/8]”)
Questions added 6/17/21: 6.8, 6.9, 6.10, 6.11 (noted with “[6/17]”)
Questions added 6/23/21: 1.7, 2.17, 2.18, 2.19, 2.20, 3.1 (appendix), 3.13, 4.8, 6.12 (noted with
“[6/23]”)
Question added 6/24/21: 2.21 (noted with “[6/24]”)
Questions added 7/14/21: 1.8, 3.14, 3.15, 4.9, 4.10, 4.11, 4.12, 6.13, 6.14, 6.15, 6.16, 6.17, 10.3
updated (noted with “[7/14]”)
Question added 11/15/21: 12.1; Questions updated 11/15/21: 9.2
Answers to frequently asked questions on distribution of funds to non-entitlement units of local
government (NEUs) can be found in this FAQ supplement, which is regularly updated.
1. Eligibility and Allocations
1.1. Which governments are eligible for funds?
The following governments are eligible:
• States and the District of Columbia
• Territories
• Tribal governments
• Counties
• Metropolitan cities
• Non-entitlement units, or smaller local governments
1.2. Which governments receive funds directly from Treasury?
Treasury will distribute funds directly to each eligible state, territory, metropolitan city,
county, or Tribal government. Smaller local governments that are classified as non-
entitlement units will receive funds through their applicable state government.
1.3. Are special-purpose units of government eligible to receive funds?
Special-purpose units of local government will not receive funding allocations; however,
a state, territory, local, or Tribal government may transfer funds to a special-purpose unit
of government. Special-purpose districts perform specific functions in the community,
such as fire, water, sewer or mosquito abatement districts.
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1.4. How are funds being allocated to Tribal governments, and how will Tribal
governments find out their allocation amounts?1
$20 billion of Fiscal Recovery Funds was reserved for Tribal governments. The
American Rescue Plan Act specifies that $1 billion will be allocated evenly to all eligible
Tribal governments. The remaining $19 billion will be distributed using an allocation
methodology based on enrollment and employment.
There will be two payments to Tribal governments. Each Tribal government’s first
payment will include (i) an amount in respect of the $1 billion allocation that is to be
divided equally among eligible Tribal governments and (ii) each Tribal government’s pro
rata share of the Enrollment Allocation. Tribal governments will be notified of their
allocation amount and delivery of payment 4-5 days after completing request for funds in
the Treasury Submission Portal. The deadline to make the initial request for funds was
June 21, 2021.
The second payment will include a Tribal government’s pro rata share of the
Employment Allocation. There is a $1,000,000 minimum employment allocation for
Tribal governments. In late-June, Tribal governments will receive an email notification
to re-enter the Treasury Submission Portal to confirm or amend their 2019 employment
numbers that were submitted to the Department of the Treasury for the CARES Act’s
Coronavirus Relief Fund. To receive an Employment Allocation, including the minimum
employment allocation, Tribal governments must confirm employment numbers by July
23, 2021. Treasury will calculate employment allocations for those Tribal governments
that confirmed or submitted amended employment numbers by the deadline. In August,
Treasury will communicate to Tribal governments the amount of their portion of the
Employment Allocation and the anticipated date for the second payment.
1.5. My county is a unit of general local government with population under 50,000. Will
my county receive funds directly from Treasury? [5/27]
Yes. All counties that are units of general local government will receive funds directly
from Treasury and should apply via the online portal. The list of county allocations is
available here.
1.6. My local government expected to be classified as a non-entitlement unit. Instead, it
was classified as a metropolitan city. Why? [5/27]
The American Rescue Plan Act defines, for purposes of the Coronavirus Local Fiscal
Recovery Fund (CLFRF), metropolitan cities to include those that are currently
metropolitan cities under the Community Development Block Grant (CDBG) program
but also those cities that relinquish or defer their status as a metropolitan city for purposes
1
The answer to this question was updated on July 19, 2021.
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of the CDBG program. This would include, by way of example, cities that are principal
cities of their metropolitan statistical area, even if their population is less than 50,000. In
other words, a city that is eligible to be a metropolitan city under the CDBG program is
eligible as a metropolitan city under the CLFRF, regardless of how that city has elected to
participate in the CDBG program.
Unofficial allocation estimates produced by other organizations may have classified
certain local governments as non-entitlement units of local government. However, based
on the statutory definitions, some of these local governments should have been classified
as metropolitan cities.
1.7. In order to receive and use Fiscal Recovery Funds, must a recipient government
maintain a declaration of emergency relating to COVID-19? [6/23]
No. Neither the statute establishing the CSFRF/CLFRF nor the Interim Final Rule
requires recipients to maintain a local declaration of emergency relating to COVID-19.
1.8. Can non-profit or private organizations receive funds? If so, how? [7/14]
Yes. Under section 602(c)(3) of the Social Security Act, a State, territory, or Tribal
government may transfer funds to a “private nonprofit organization . . . , a Tribal
organization . . . , a public benefit corporation involved in the transportation of
passengers or cargo, or a special-purpose unit of State or local government.” Similarly,
section 603(c)(3) authorizes a local government to transfer funds to the same entities
(other than Tribal organizations). The Interim Final Rule clarifies that the lists of
transferees in sections 602(c)(3) and 603(c)(3) are not exclusive, and recipients may
transfer funds to constituent units of government or private entities beyond those
specified in the statute. A transferee receiving a transfer from a recipient under sections
602(c)(3) and 603(c)(3) will be considered to be a subrecipient and will be expected to
comply with all subrecipient reporting requirements.
The ARPA does not authorize Treasury to provide CSFRF/CLFRF funds directly to non-
profit or private organizations. Thus, non-profit or private organizations should seek
funds from CSFRF/CLFRF recipient(s) in their jurisdiction (e.g., a State, local, territorial,
or Tribal government).
2. Eligible Uses – Responding to the Public Health Emergency / Negative
Economic Impacts
2.1. What types of COVID-19 response, mitigation, and prevention activities are
eligible?
A broad range of services are needed to contain COVID-19 and are eligible uses,
including vaccination programs; medical care; testing; contact tracing; support for
isolation or quarantine; supports for vulnerable populations to access medical or public
health services; public health surveillance (e.g., monitoring case trends, genomic
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sequencing for variants); enforcement of public health orders; public communication
efforts; enhancement to health care capacity, including through alternative care facilities;
purchases of personal protective equipment; support for prevention, mitigation, or other
services in congregate living facilities (e.g., nursing homes, incarceration settings,
homeless shelters, group living facilities) and other key settings like schools; ventilation
improvements in congregate settings, health care settings, or other key locations;
enhancement of public health data systems; and other public health responses. Capital
investments in public facilities to meet pandemic operational needs are also eligible, such
as physical plant improvements to public hospitals and health clinics or adaptations to
public buildings to implement COVID-19 mitigation tactics.
2.2. If a use of funds was allowable under the Coronavirus Relief Fund (CRF) to
respond to the public health emergency, may recipients presume it is also allowable
under CSFRF/CLFRF?
Generally, funding uses eligible under CRF as a response to the direct public health
impacts of COVID-19 will continue to be eligible under CSFRF/CLFRF, with the
following two exceptions: (1) the standard for eligibility of public health and safety
payrolls has been updated; and (2) expenses related to the issuance of tax-anticipation
notes are not an eligible funding use.
2.3. If a use of funds is not explicitly permitted in the Interim Final Rule as a response to
the public health emergency and its negative economic impacts, does that mean it is
prohibited?
The Interim Final Rule contains a non-exclusive list of programs or services that may be
funded as responding to COVID-19 or the negative economic impacts of the COVID-19
public health emergency, along with considerations for evaluating other potential uses of
Fiscal Recovery Funds not explicitly listed. The Interim Final Rule also provides
flexibility for recipients to use Fiscal Recovery Funds for programs or services that are
not identified on these non-exclusive lists but which meet the objectives of section
602(c)(1)(A) or 603(c)(1)(A) by responding to the COVID-19 public health emergency
with respect to COVID-19 or its negative economic impacts.
2.4. May recipients use funds to respond to the public health emergency and its negative
economic impacts by replenishing state unemployment funds?
Consistent with the approach taken in the CRF, recipients may make deposits into the
state account of the Unemployment Trust Fund up to the level needed to restore the pre-
pandemic balances of such account as of January 27, 2020, or to pay back advances
received for the payment of benefits between January 27, 2020 and the date when the
Interim Final Rule is published in the Federal Register.
2.5. What types of services are eligible as responses to the negative economic impacts of
the pandemic?
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Eligible uses in this category include assistance to households; small businesses and non-
profits; and aid to impacted industries.
Assistance to households includes, but is not limited to: food assistance; rent, mortgage,
or utility assistance; counseling and legal aid to prevent eviction or homelessness; cash
assistance; emergency assistance for burials, home repairs, weatherization, or other
needs; internet access or digital literacy assistance; or job training to address negative
economic or public health impacts experienced due to a worker’s occupation or level of
training.
Assistance to small business and non-profits includes, but is not limited to:
• loans or grants to mitigate financial hardship such as declines in revenues or
impacts of periods of business closure, for example by supporting payroll and
benefits costs, costs to retain employees, mortgage, rent, or utilities costs, and
other operating costs;
• Loans, grants, or in-kind assistance to implement COVID-19 prevention or
mitigation tactics, such as physical plant changes to enable social distancing,
enhanced cleaning efforts, barriers or partitions, or COVID-19 vaccination,
testing, or contact tracing programs; and
• Technical assistance, counseling, or other services to assist with business planning
needs
2.6. May recipients use funds to respond to the public health emergency and its negative
economic impacts by providing direct cash transfers to households?
Yes, provided the recipient considers whether, and the extent to which, the household has
experienced a negative economic impact from the pandemic. Additionally, cash transfers
must be reasonably proportional to the negative economic impact they are intended to
address. Cash transfers grossly in excess of the amount needed to address the negative
economic impact identified by the recipient would not be considered to be a response to
the COVID-19 public health emergency or its negative impacts. In particular, when
considering appropriate size of permissible cash transfers made in response to the
COVID-19 public health emergency, state, local, territorial, and Tribal governments may
consider and take guidance from the per person amounts previously provided by the
federal government in response to the COVID crisis.
2.7. May funds be used to reimburse recipients for costs incurred by state and local
governments in responding to the public health emergency and its negative
economic impacts prior to passage of the American Rescue Plan?
Use of Fiscal Recovery Funds is generally forward looking. The Interim Final Rule
permits funds to be used to cover costs incurred beginning on March 3, 2021.
2.8. May recipients use funds for general economic development or workforce
development?
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Generally, not. Recipients must demonstrate that funding uses directly address a negative
economic impact of the COVID-19 public health emergency, including funds used for
economic or workforce development. For example, job training for unemployed workers
may be used to address negative economic impacts of the public health emergency and be
eligible.
2.9. How can recipients use funds to assist the travel, tourism, and hospitality
industries?
Aid provided to tourism, travel, and hospitality industries should respond to the negative
economic impacts of the pandemic. For example, a recipient may provide aid to support
safe reopening of businesses in the tourism, travel and hospitality industries and to
districts that were closed during the COVID-19 public health emergency, as well as aid a
planned expansion or upgrade of tourism, travel and hospitality facilities delayed due to
the pandemic.
Tribal development districts are considered the commercial centers for tribal hospitality,
gaming, tourism and entertainment industries.
2.10. May recipients use funds to assist impacted industries other than travel, tourism,
and hospitality?
Yes, provided that recipients consider the extent of the impact in such industries as
compared to tourism, travel, and hospitality, the industries enumerated in the statute. For
example, nationwide the leisure and hospitality industry has experienced an
approximately 17 percent decline in employment and 24 percent decline in revenue, on
net, due to the COVID-19 public health emergency. Recipients should also consider
whether impacts were due to the COVID-19 pandemic, as opposed to longer-term
economic or industrial trends unrelated to the pandemic.
Recipients should maintain records to support their assessment of how businesses or
business districts receiving assistance were affected by the negative economic impacts of
the pandemic and how the aid provided responds to these impacts.
2.11. How does the Interim Final Rule help address the disparate impact of COVID-19 on
certain populations and geographies?
In recognition of the disproportionate impacts of the COVID-19 virus on health and
economic outcomes in low-income and Native American communities, the Interim Final
Rule identifies a broader range of services and programs that are considered to be in
response to the public health emergency when provided in these communities.
Specifically, Treasury will presume that certain types of services are eligible uses when
provided in a Qualified Census Tract (QCT), to families living in QCTs, or when these
services are provided by Tribal governments.
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Recipients may also provide these services to other populations, households, or
geographic areas disproportionately impacted by the pandemic. In identifying these
disproportionately-impacted communities, recipients should be able to support their
determination for how the pandemic disproportionately impacted the populations,
households, or geographic areas to be served.
Eligible services include:
• Addressing health disparities and the social determinants of health, including:
community health workers, public benefits navigators, remediation of lead paint
or other lead hazards, and community violence intervention programs;
• Building stronger neighborhoods and communities, including: supportive housing
and other services for individuals experiencing homelessness, development of
affordable housing, and housing vouchers and assistance relocating to
neighborhoods with higher levels of economic opportunity;
• Addressing educational disparities exacerbated by COVID-19, including: early
learning services, increasing resources for high-poverty school districts,
educational services like tutoring or afterschool programs, and supports for
students’ social, emotional, and mental health needs; and
• Promoting healthy childhood environments, including: child care, home visiting
programs for families with young children, and enhanced services for child
welfare-involved families and foster youth.
2.12. May recipients use funds to pay for vaccine incentive programs (e.g., cash or in-kind
transfers, lottery programs, or other incentives for individuals who get vaccinated)?
Yes. Under the Interim Final Rule, recipients may use Coronavirus State and Local
Fiscal Recovery Funds to respond to the COVID-19 public health emergency, including
expenses related to COVID-19 vaccination programs. See 31 CFR 35.6(b)(1)(i).
Programs that provide incentives reasonably expected to increase the number of people
who choose to get vaccinated, or that motivate people to get vaccinated sooner than they
otherwise would have, are an allowable use of funds so long as such costs are reasonably
proportional to the expected public health benefit.
2.13. May recipients use funds to pay “back to work incentives” (e.g., cash payments for
newly employed workers after a certain period of time on the job)? [5/27]
Yes. Under the Interim Final Rule, recipients may use Coronavirus State and Local
Fiscal Recovery Funds to provide assistance to unemployed workers. See 31 CFR
35.6(b)(4). This assistance can include job training or other efforts to accelerate rehiring
and thus reduce unemployment, such as childcare assistance, assistance with
transportation to and from a jobsite or interview, and incentives for newly employed
workers.
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2.14. The Coronavirus Relief Fund (CRF) included as an eligible use: "Payroll expenses
for public safety, public health, health care, human services, and similar employees
whose services are substantially dedicated to mitigating or responding to the
COVID-19 public health emergency." What has changed in CSFRF/CLFRF, and
what type of documentation is required under CSFRF/CLFRF? [5/27]
Many of the expenses authorized under the Coronavirus Relief Fund are also eligible uses
under the CSFRF/CLFRF. However, in the case of payroll expenses for public safety,
public health, health care, human services, and similar employees (hereafter, public
health and safety staff), the CSFRF/CLFRF does differ from the CRF. This change
reflects the differences between the ARPA and CARES Act and recognizes that the
response to the COVID-19 public health emergency has changed and will continue to
change over time. In particular, funds may be used for payroll and covered benefits
expenses for public safety, public health, health care, human services, and similar
employees, including first responders, to the extent that the employee’s time that is
dedicated to responding to the COVID-19 public health emergency.
For administrative convenience, the recipient may consider a public health and safety
employee to be entirely devoted to mitigating or responding to the COVID-19 public
health emergency, and therefore fully covered, if the employee, or his or her operating
unit or division, is primarily dedicated (e.g., more than half of the employee’s time is
dedicated) to responding to the COVID-19 public health emergency.
Recipients may use presumptions for assessing whether an employee, division, or
operating unit is primarily dedicated to COVID-19 response. The recipient should
maintain records to support its assessment, such as payroll records, attestations from
supervisors or staff, or regular work product or correspondence demonstrating work on
the COVID-19 response. Recipients need not routinely track staff hours. Recipients
should periodically reassess their determinations.
2.15. What staff are included in “public safety, public health, health care, human
services, and similar employees”? Would this include, for example, 911 operators,
morgue staff, medical examiner staff, or EMS staff? [5/27]
As discussed in the Interim Final Rule, funds may be used for payroll and covered
benefits expenses for public safety, public health, health care, human services, and
similar employees, for the portion of the employee’s time that is dedicated to responding
to the COVID-19 public health emergency.
Public safety employees would include police officers (including state police officers),
sheriffs and deputy sheriffs, firefighters, emergency medical responders, correctional and
detention officers, and those who directly support such employees such as dispatchers
and supervisory personnel. Public health employees would include employees involved
in providing medical and other health services to patients and supervisory personnel,
including medical staff assigned to schools, prisons, and other such institutions, and other
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support services essential for patient care (e.g., laboratory technicians, medical examiner
or morgue staff) as well as employees of public health departments directly engaged in
matters related to public health and related supervisory personnel. Human services staff
include employees providing or administering social services; public benefits; child
welfare services; and child, elder, or family care, as well as others.
2.16. May recipients use funds to establish a public jobs program? [6/8]
Yes. The Interim Final Rule permits a broad range of services to unemployed or
underemployed workers and other individuals that suffered negative economic impacts
from the pandemic. That can include public jobs programs, subsidized employment,
combined education and on-the-job training programs, or job training to accelerate
rehiring or address negative economic or public health impacts experienced due to a
worker’s occupation or level of training. The broad range of permitted services can also
include other employment supports, such as childcare assistance or assistance with
transportation to and from a jobsite or interview.
The Interim Final Rule includes as an eligible use re-hiring public sector staff up to the
government’s level of pre-pandemic employment. “Public sector staff” would not
include individuals participating in a job training or subsidized employment program
administered by the recipient.
2.17. The Interim Final Rule states that “assistance or aid to individuals or businesses
that did not experience a negative economic impact from the public health
emergency would not be an eligible use under this category.” Are recipients
required to demonstrate that each individual or business experienced a negative
economic impact for that individual or business to receive assistance? [6/23]
Not necessarily. The Interim Final Rule allows recipients to demonstrate a negative
economic impact on a population or group and to provide assistance to households or
businesses that fall within that population or group. In such cases, the recipient need only
demonstrate that the household or business is within the population or group that
experienced a negative economic impact.
For assistance to households, the Interim Final Rule states, “In assessing whether a
household or population experienced economic harm as a result of the pandemic, a
recipient may presume that a household or population that experienced unemployment or
increased food or housing insecurity or is low- or moderate-income experienced negative
economic impacts resulting from the pandemic.” This would allow, for example, an
internet access assistance program for all low- or moderate-income households, but
would not require the recipient to demonstrate or document that each individual low- or -
moderate income household experienced a negative economic impact from the COVID-
19 public health emergency apart from being low- or -moderate income.
For assistance to small businesses, the Interim Final Rule states that assistance may be
provided to small businesses, including loans, grants, in-kind assistance, technical
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assistance or other services, to respond to the negative economic impacts of the COVID-
19 public health emergency. In providing assistance to small businesses, recipients must
design a program that responds to the negative economic impacts of the COVID-19
public health emergency, including by identifying how the program addresses the
identified need or impact faced by small businesses. This can include assistance to adopt
safer operating procedures, weather periods of closure, or mitigate financial hardship
resulting from the COVID-19 public health emergency.
As part of program design and to ensure that the program responds to the identified need,
recipients may consider additional criteria to target assistance to businesses in need,
including to small businesses. Assistance may be targeted to businesses facing financial
insecurity, with substantial declines in gross receipts (e.g., comparable to measures used
to assess eligibility for the Paycheck Protection Program), or facing other economic harm
due to the pandemic, as well as businesses with less capacity to weather financial
hardship, such as the smallest businesses, those with less access to credit, or those serving
disadvantaged communities. For example, a recipient could find based on local data or
research that the smallest businesses faced sharply increased risk of bankruptcy and
develop a program to respond; such a program would only need to document a population
or group-level negative economic impact, and eligibility criteria to limit access to the
program to that population or group (in this case, the smallest businesses).
In addition, recognizing the disproportionate impact of the pandemic on disadvantaged
communities, the Interim Final Rule also identifies a set of services that are
presumptively eligible when provided in a Qualified Census Tract (QCT); to families and
individuals living in QCTs; to other populations, households, or geographic areas
identified by the recipient as disproportionately impacted by the pandemic; or when these
services are provided by Tribal governments. For more information on the set of
presumptively eligible services, see the Interim Final Rule section on Building Stronger
Communities through Investments in Housing and Neighborhoods and FAQ 2.11.
2.18. Would investments in improving outdoor spaces (e.g. parks) be an eligible use of
funds as a response to the public health emergency and/or its negative economic
impacts? [6/23]
There are multiple ways that investments in improving outdoor spaces could qualify as
eligible uses; several are highlighted below, though there may be other ways that a
specific investment in outdoor spaces would meet eligible use criteria.
First, in recognition of the disproportionate negative economic impacts on certain
communities and populations, the Interim Final Rule identifies certain types of services
that are eligible uses when provided in a Qualified Census Tract (QCT), to families and
individuals living in QCTs, or when these services are provided by Tribal governments.
Recipients may also provide these services to other populations, households, or
geographic areas disproportionately impacted by the pandemic.
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These programs and services include services designed to build stronger neighborhoods
and communities and to address health disparities and the social determinants of health.
The Interim Final Rule provides a non-exhaustive list of eligible services to respond to
the needs of communities disproportionately impacted by the pandemic, and recipients
may identify other uses of funds that do so, consistent with the Rule’s framework. For
example, investments in parks, public plazas, and other public outdoor recreation spaces
may be responsive to the needs of disproportionately impacted communities by
promoting healthier living environments and outdoor recreation and socialization to
mitigate the spread of COVID-19.
Second, recipients may provide assistance to small businesses in all communities.
Assistance to small businesses could include support to enhance outdoor spaces for
COVID-19 mitigation (e.g., restaurant patios) or to improve the built environment of the
neighborhood (e.g., façade improvements).
Third, many governments saw significantly increased use of parks during the pandemic
that resulted in damage or increased maintenance needs. The Interim Final Rule
recognizes that “decrease[s to] a state or local government’s ability to effectively
administer services” can constitute a negative economic impact of the pandemic.
2.19. Would expenses to address a COVID-related backlog in court cases be an eligible
use of funds as a response to the public health emergency? [6/23]
The Interim Final Rule recognizes that “decrease[s to] a state or local government’s
ability to effectively administer services,” such as cuts to public sector staffing levels, can
constitute a negative economic impact of the pandemic. During the COVID-19 public
health emergency, many courts were unable to operate safely during the pandemic and, as
a result, now face significant backlogs. Court backlogs resulting from inability of courts
to safely operate during the COVID-19 pandemic decreased the government’s ability to
administer services. Therefore, steps to reduce these backlogs, such as implementing
COVID-19 safety measures to facilitate court operations, hiring additional court staff or
attorneys to increase speed of case resolution, and other expenses to expedite case
resolution are eligible uses.
2.20. Can funds be used to assist small business startups as a response to the negative
economic impact of COVID-19? [6/23]
As discussed in the Interim Final Rule, recipients may provide assistance to small
businesses that responds to the negative economic impacts of COVID-19. The Interim
Final Rule provides a non-exclusive list of potential assistance mechanisms, as well as
considerations for ensuring that such assistance is responsive to the negative economic
impacts of COVID-19.
Treasury acknowledges a range of potential circumstances in which assisting small
business startups could be responsive to the negative economic impacts of COVID-19,
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including for small businesses and individuals seeking to start small businesses after the
start of the COVID-19 public health emergency. For example:
• A recipient could assist small business startups with additional costs associated
with COVID-19 mitigation tactics (e.g., barriers or partitions; enhanced cleaning;
or physical plant changes to enable greater use of outdoor space).
• A recipient could identify and respond to a negative economic impact of COVID-
19 on new small business startups; for example, if it could be shown that small
business startups in a locality were facing greater difficult accessing credit than
prior to the pandemic, faced increased costs to starting the business due to the
pandemic, or that the small business had lost expected startup capital due to the
pandemic.
• The Interim Final Rule also discusses eligible uses that provide support for
individuals who have experienced a negative economic impact from the COVID-
19 public health emergency, including uses that provide job training for
unemployed individuals. These initiatives also may support small business
startups and individuals seeking to start small businesses.
2.21. Can funds be used for eviction prevention efforts or housing stability services?
[6/24]
Yes. Responses to the negative economic impacts of the pandemic include “rent,
mortgage, or utility assistance [and] counseling and legal aid to prevent eviction or
homelessness.” This includes housing stability services that enable eligible households to
maintain or obtain housing, such as housing counseling, fair housing counseling, case
management related to housing stability, outreach to households at risk of eviction or
promotion of housing support programs, housing related services for survivors of
domestic abuse or human trafficking, and specialized services for individuals with
disabilities or seniors that supports their ability to access or maintain housing.
This also includes legal aid such as legal services or attorney’s fees related to eviction
proceedings and maintaining housing stability, court-based eviction prevention or
eviction diversion programs, and other legal services that help households maintain or
obtain housing.
Recipients may transfer funds to, or execute grants or contracts with, court systems, non-
profits, and a wide range of other organizations to implement these strategies.
3. Eligible Uses – Revenue Loss
3.1. How is revenue defined for the purpose of this provision? [appendix added 6/23]
The Interim Final Rule adopts a definition of “General Revenue” that is based on, but not
identical, to the Census Bureau’s concept of “General Revenue from Own Sources” in the
Annual Survey of State and Local Government Finances.
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General Revenue includes revenue from taxes, current charges, and miscellaneous
general revenue. It excludes refunds and other correcting transactions, proceeds from
issuance of debt or the sale of investments, agency or private trust transactions, and
revenue generated by utilities and insurance trusts. General revenue also includes
intergovernmental transfers between state and local governments, but excludes
intergovernmental transfers from the Federal government, including Federal transfers
made via a state to a locality pursuant to the CRF or the Fiscal Recovery Funds.
Tribal governments may include all revenue from Tribal enterprises and gaming
operations in the definition of General Revenue.
Please see the appendix for a diagram of the Interim Final Rule’s definition of General
Revenue within the Census Bureau’s revenue classification structure.
3.2. Will revenue be calculated on an entity-wide basis or on a source-by-source basis
(e.g. property tax, income tax, sales tax, etc.)?
Recipients should calculate revenue on an entity-wide basis. This approach minimizes
the administrative burden for recipients, provides for greater consistency across
recipients, and presents a more accurate representation of the net impact of the
COVID- 19 public health emergency on a recipient’s revenue, rather than relying on
financial reporting prepared by each recipient, which vary in methodology used and
which generally aggregates revenue by purpose rather than by source.
3.3. Does the definition of revenue include outside concessions that contract with a state
or local government?
Recipients should classify revenue sources as they would if responding to the U.S.
Census Bureau’s Annual Survey of State and Local Government Finances. According to
the Census Bureau’s Government Finance and Employment Classification manual, the
following is an example of current charges that would be included in a state or local
government’s general revenue from own sources: “Gross revenue of facilities operated by
a government (swimming pools, recreational marinas and piers, golf courses, skating
rinks, museums, zoos, etc.); auxiliary facilities in public recreation areas (camping areas,
refreshment stands, gift shops, etc.); lease or use fees from stadiums, auditoriums, and
community and convention centers; and rentals from concessions at such facilities.”
3.4. What is the time period for estimating revenue loss? Will revenue losses experienced
prior to the passage of the Act be considered?
Recipients are permitted to calculate the extent of reduction in revenue as of four points
in time: December 31, 2020; December 31, 2021; December 31, 2022; and December 31,
2023. This approach recognizes that some recipients may experience lagged effects of the
pandemic on revenues.
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Upon receiving Fiscal Recovery Fund payments, recipients may immediately calculate
revenue loss for the period ending December 31, 2020.
3.5. What is the formula for calculating the reduction in revenue?
A reduction in a recipient’s General Revenue equals:
nt
Max {[Base Year Revenue* (1+Growth Adjustment)(12) ] - Actual General Revenuet ; 0}
Where:
Base Year Revenue is General Revenue collected in the most recent full fiscal year prior
to the COVD-19 public health emergency.
Growth Adjustment is equal to the greater of 4.1 percent (or 0.041) and the recipient’s
average annual revenue growth over the three full fiscal years prior to the COVID-19
public health emergency.
n equals the number of months elapsed from the end of the base year to the calculation
date.
Actual General Revenue is a recipient’s actual general revenue collected during 12-month
period ending on each calculation date.
Subscript t denotes the calculation date.
3.6. Are recipients expected to demonstrate that reduction in revenue is due to the
COVID-19 public health emergency?
In the Interim Final Rule, any diminution in actual revenue calculated using the formula
above would be presumed to have been “due to” the COVID-19 public health emergency.
This presumption is made for administrative ease and in recognition of the broad-based
economic damage that the pandemic has wrought.
3.7. May recipients use pre-pandemic projections as a basis to estimate the reduction in
revenue?
No. Treasury is disallowing the use of projections to ensure consistency and
comparability across recipients and to streamline verification. However, in estimating
the revenue shortfall using the formula above, recipients may incorporate their average
annual revenue growth rate in the three full fiscal years prior to the public health
emergency.
3.8. Once a recipient has identified a reduction in revenue, are there any restrictions on
how recipients use funds up to the amount of the reduction?
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The Interim Final Rule gives recipients broad latitude to use funds for the provision of
government services to the extent of reduction in revenue. Government services can
include, but are not limited to, maintenance of infrastructure or pay-go spending for
building new infrastructure, including roads; modernization of cybersecurity, including
hardware, software, and protection of critical infrastructure; health services;
environmental remediation; school or educational services; and the provision of police,
fire, and other public safety services.
However, paying interest or principal on outstanding debt, replenishing rainy day or other
reserve funds, or paying settlements or judgments would not be considered provision of a
government service, since these uses of funds do not entail direct provision of services to
citizens. This restriction on paying interest or principal on any outstanding debt
instrument, includes, for example, short-term revenue or tax anticipation notes, or paying
fees or issuance costs associated with the issuance of new debt. In addition, the
overarching restrictions on all program funds (e.g., restriction on pension deposits,
restriction on using funds for non-federal match where barred by regulation or statute)
would apply.
3.9. How do I know if a certain type of revenue should be counted for the purpose of
computing revenue loss? [5/27]
As discussed in FAQ #3.1, the Interim Final Rule adopts a definition of “General
Revenue” that is based on, but not identical, to the Census Bureau’s concept of “General
Revenue from Own Sources” in the Annual Survey of State and Local Government
Finances.
Recipients should refer to the definition of “General Revenue” included in the Interim
Final Rule. See 31 CFR 35.3. If a recipient is unsure whether a particular revenue source
is included in the Interim Final Rule’s definition of “General Revenue,” the recipient may
consider the classification and instructions used to complete the Census Bureau’s Annual
Survey.
For example, parking fees would be classified as a Current Charge for the purpose of the
Census Bureau’s Annual Survey, and the Interim Final Rule’s concept of “General
Revenue” includes all Current Charges. Therefore, parking fees would be included in the
Interim Final Rule’s concept of “General Revenue.”
The Census Bureau’s Government Finance and Employment Classification manual is
available here.
3.10. In calculating revenue loss, are recipients required to use audited financials? [6/8]
Where audited data is not available, recipients are not required to obtain audited data.
Treasury expects all information submitted to be complete and accurate. See 31 CFR
35.4(c).
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3.11. In calculating revenue loss, should recipients use their own data, or Census data?
[6/8]
Recipients should use their own data sources to calculate general revenue, and do not
need to rely on published revenue data from the Census Bureau. Treasury acknowledges
that due to differences in timing, data sources, and definitions, recipients’ self-reported
general revenue figures may differ somewhat from those published by the Census
Bureau.
3.12. Should recipients calculate revenue loss on a cash basis or an accrual basis? [6/8]
Recipients may provide data on a cash, accrual, or modified accrual basis, provided that
recipients are consistent in their choice of methodology throughout the covered period
and until reporting is no longer required.
3.13. In identifying intergovernmental revenue for the purpose of calculating General
Revenue, should recipients exclude all federal funding, or just federal funding
related to the COVID-19 response? How should local governments treat federal
funds that are passed through states or other entities, or federal funds that are
intermingled with other funds? [6/23]
In calculating General Revenue, recipients should exclude all intergovernmental transfers
from the federal government. This includes, but is not limited to, federal transfers made
via a state to a locality pursuant to the Coronavirus Relief Fund or Fiscal Recovery
Funds. To the extent federal funds are passed through states or other entities or
intermingled with other funds, recipients should attempt to identify and exclude the
federal portion of those funds from the calculation of General Revenue on a best-efforts
basis.
3.14. What entities constitute a government for the purpose of calculating revenue loss?
[7/14]
In determining whether a particular entity is part of a recipient’s government for purposes
of measuring a recipient’s government revenue, recipients should identify all the entities
included in their government and the general revenue attributable to these entities on a
best-efforts basis. Recipients are encouraged to consider how their administrative
structure is organized under state and local statutes. In cases in which the autonomy of
certain authorities, commissions, boards, districts, or other entities is not readily
distinguishable from the recipient’s government, recipients may adopt the Census
Bureau’s criteria for judging whether an entity is independent from, or a constituent of, a
given government. For an entity to be independent, it generally meets all four of the
following conditions:
• The entity is an organized entity and possesses corporate powers, such as
perpetual succession, the right to sue and be sued, having a name, the ability to
make contracts, and the ability to acquire and dispose of property.
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• The entity has governmental character, meaning that it provides public services,
or wields authority through a popularly elected governing body or officers
appointed by public officials. A high degree of responsibility to the public,
demonstrated by public reporting requirements or by accessibility of records for
public inspection, also evidences governmental character.
• The entity has substantial fiscal independence, meaning it can determine its
budget without review and modification by other governments. For instance, the
entity can determine its own taxes, charges, and debt issuance without another
government’s supervision.
• The entity has substantial administrative independence, meaning it has a
popularly elected governing body, or has a governing body representing two or
more governments, or, in the event its governing body is appointed by another
government, the entity performs functions that are essentially different from those
of, and are not subject to specification by, its creating government.
If an entity does not meet all four of these conditions, a recipient may classify the entity
as part of the recipient’s government and assign the portion of General Revenue that
corresponds to the entity.
To further assist recipients in applying the forgoing criteria, recipients may refer to the
Census Bureau’s Individual State Descriptions: 2017 Census of Governments
publication, which lists specific entities and classes of entities classified as either
independent (defined by Census as “special purpose governments”) or constituent
(defined by Census as “dependent agencies”) on a state-by-state basis. Recipients should
note that the Census Bureau’s lists are not exhaustive and that Census classifications are
based on an analysis of state and local statutes as of 2017 and subject to the Census
Bureau’s judgement. Though not included in the Census Bureau’s publication, state
colleges and universities are generally classified as dependent agencies of state
governments by the Census Bureau.
If an entity is determined to be part of the recipient’s government, the recipient must also
determine whether the entity’s revenue is covered by the Interim Final Rule’s definition
of “general revenue.” For example, some cash flows may be outside the definition of
“general revenue.” In addition, note that the definition of general revenue includes Tribal
enterprises in the case of Tribal governments. Refer to FAQ 3.1 (and the Appendix) for
the components included in General Revenue.
3.15. The Interim Final Rule’s definition of General Revenue excludes revenue generated
by utilities. Can you please clarify the definition of utility revenue? [7/14]
As noted in FAQs 3.1 and 3.9, the Interim Final Rule adopts a definition of “general
revenue” that is based on, but not identical to, the Census Bureau’s concept of “General
Revenue from Own Sources” in the Annual Survey of State and Local Government
Finances. Recipients should refer to the definition of “general revenue” included in the
Interim Final Rule. See 31 CFR 35.3. If a recipient is unsure whether a particular
revenue source is included in the Interim Final Rule’s definition of “general revenue,” the
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recipient may consider the classification and instructions used to complete the Census
Bureau’s Annual Survey.
According to the Census Bureau’s Government Finance and Employment Classification
manual, utility revenue is defined as “[g]ross receipts from sale of utility commodities or
services to the public or other governments by publicly-owned and controlled utilities.”
This includes revenue from operations of publicly-owned and controlled water supply
systems, electric power systems, gas supply systems, and public mass transit systems (see
pages 4-45 and 4-46 of the manual for more detail).
Except for these four types of utilities, revenues from all commercial-type activities of a
recipient’s government (e.g., airports, educational institutions, lotteries, public hospitals,
public housing, parking facilities, port facilities, sewer or solid waste systems, and toll
roads and bridges) are covered by the Interim Final Rule’s definition of “general
revenue.” If a recipient is unsure whether a particular entity performing one of these
commercial-type activities can be considered part of the recipient’s government, please
see FAQ 3.14.
4. Eligible Uses – General
4.1. May recipients use funds to replenish a budget stabilization fund, rainy day fund, or
similar reserve account?
No. Funds made available to respond to the public health emergency and its negative
economic impacts are intended to help meet pandemic response needs and provide
immediate stabilization for households and businesses. Contributions to rainy day funds
and similar reserves funds would not address these needs or respond to the COVID-19
public health emergency, but would rather be savings for future spending needs.
Similarly, funds made available for the provision of governmental services (to the extent
of reduction in revenue) are intended to support direct provision of services to citizens.
Contributions to rainy day funds are not considered provision of government services,
since such expenses do not directly relate to the provision of government services.
4.2. May recipients use funds to invest in infrastructure other than water, sewer, and
broadband projects (e.g. roads, public facilities)?
Under 602(c)(1)(C) or 603(c)(1)(C), recipients may use funds for maintenance of
infrastructure or pay-go spending for building of new infrastructure as part of the general
provision of government services, to the extent of the estimated reduction in revenue due
to the public health emergency.
Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not
be considered a response to the public health emergency and its negative economic
impacts unless the project responds to a specific pandemic-related public health need
(e.g., investments in facilities for the delivery of vaccines) or a specific negative
economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract).
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4.3. May recipients use funds to pay interest or principal on outstanding debt?
No. Expenses related to financing, including servicing or redeeming notes, would not
address the needs of pandemic response or its negative economic impacts. Such expenses
would also not be considered provision of government services, as these financing
expenses do not directly provide services or aid to citizens.
This applies to paying interest or principal on any outstanding debt instrument, including,
for example, short-term revenue or tax anticipation notes, or paying fees or issuance costs
associated with the issuance of new debt.
4.4. May recipients use funds to satisfy nonfederal matching requirements under the
Stafford Act? May recipients use funds to satisfy nonfederal matching requirements
generally?
Fiscal Recovery Funds are subject to pre-existing limitations in other federal statutes and
regulations and may not be used as non-federal match for other Federal programs whose
statute or regulations bar the use of Federal funds to meet matching requirements. For
example, expenses for the state share of Medicaid are not an eligible use. For information
on FEMA programs, please see here.
4.5. Are governments required to submit proposed expenditures to Treasury for
approval? [5/27]
No. Recipients are not required to submit planned expenditures for prior approval by
Treasury. Recipients are subject to the requirements and guidelines for eligible uses
contained in the Interim Final Rule.
4.6. How do I know if a specific use is eligible? [5/27]
Fiscal Recovery Funds must be used in one of the four eligible use categories specified in
the American Rescue Plan Act and implemented in the Interim Final Rule:
a) To respond to the public health emergency or its negative economic impacts,
including assistance to households, small businesses, and nonprofits, or aid to
impacted industries such as tourism, travel, and hospitality;
b) To respond to workers performing essential work during the COVID-19 public
health emergency by providing premium pay to eligible workers;
c) For the provision of government services to the extent of the reduction in revenue
due to the COVID–19 public health emergency relative to revenues collected in
the most recent full fiscal year prior to the emergency; and
d) To make necessary investments in water, sewer, or broadband infrastructure.
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Recipients should consult Section II of the Interim Final Rule for additional information
on eligible uses. For recipients evaluating potential uses under (a), the Interim Final Rule
contains a non-exclusive list of programs or services that may be funded as responding to
COVID-19 or the negative economic impacts of the COVID-19 public health emergency,
along with considerations for evaluating other potential uses of Fiscal Recovery Funds
not explicitly listed. See Section II of the Interim Final Rule for additional discussion.
For recipients evaluating potential uses under (c), the Interim Final Rule gives recipients
broad latitude to use funds for the provision of government services to the extent of
reduction in revenue. See FAQ #3.8 for additional discussion.
For recipients evaluating potential uses under (b) and (d), see Sections 5 and 6.
4.7. Do restrictions on using Coronavirus State and Local Fiscal Recovery Funds to
cover costs incurred beginning on March 3, 2021 apply to costs incurred by the
recipient (e.g., a State, local, territorial, or Tribal government) or to costs incurred
by households, businesses, and individuals benefiting from assistance provided using
Coronavirus State and Local Fiscal Recovery Funds? [6/8]
The Interim Final Rule permits funds to be used to cover costs incurred beginning on
March 3, 2021. This limitation applies to costs incurred by the recipient (i.e., the state,
local, territorial, or Tribal government receiving funds). However, recipients may use
Coronavirus State and Local Fiscal Recovery Funds to provide assistance to households,
businesses, and individuals within the eligible use categories described in the Interim
Final Rule for economic harms experienced by those households, businesses, and
individuals prior to March 3, 2021. For example,
• Public Health/Negative Economic Impacts – Recipients may use Coronavirus
State and Local Fiscal Recovery Funds to provide assistance to households – such
as rent, mortgage, or utility assistance – for economic harms experienced or costs
incurred by the household prior to March 3, 2021 (e.g., rental arrears from
preceding months), provided that the cost of providing assistance to the household
was not incurred by the recipient prior to March 3, 2021.
• Premium Pay – Recipients may provide premium pay retrospectively for work
performed at any time since the start of the COVID-19 public health emergency.
Such premium pay must be “in addition to” wages and remuneration already
received and the obligation to provide such pay must not have been incurred by
the recipient prior to March 3, 2021.
• Revenue Loss – The Interim Final Rule gives recipients broad latitude to use
funds for the provision of government services to the extent of reduction in
revenue. The calculation of lost revenue begins with the recipient’s revenue in
the last full fiscal year prior to the COVID-19 public health emergency and
includes the 12-month period ending December 31, 2020. However, use of funds
for government services must be forward looking for costs incurred by the
recipient after March 3, 2021.
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• Investments in Water, Sewer, and Broadband – Recipients may use Coronavirus
State and Local Fiscal Recovery Funds to make necessary investments in water,
sewer, and broadband. See FAQ Section 6. Recipients may use Coronavirus
State and Local Fiscal Recovery Funds to cover costs incurred for eligible
projects planned or started prior to March 3, 2021, provided that the project costs
covered by the Coronavirus State and Local Fiscal Recovery Funds were incurred
after March 3, 2021.
4.8. How can I use CSFRF/CLFRF funds to prevent and respond to crime, and support
public safety in my community? [6/23]
Under Treasury’s Interim Final Rule, there are many ways in which the State and Local
Fiscal Recovery Funds (“Funds”) under the American Rescue Plan Act can support
communities working to reduce and respond to increased violence due to the pandemic.
Among the eligible uses of the Funds are restoring of public sector staff to their pre-
pandemic levels and responses to the public health crisis and negative economic impacts
resulting from the pandemic. The Interim Final Rule provides several ways for recipients
to “respond to” this pandemic-related gun violence, ranging from community violence
intervention programs to mental health services to hiring of public safety personnel.
Below are some examples of how Fiscal Recovery Funds can be used to address public
safety:
• In all communities, recipients may use resources to rehire police officers and other public
servants to restore law enforcement and courts to their pre-pandemic levels.
Additionally, Funds can be used for expenses to address COVID-related court backlogs,
including hiring above pre-pandemic levels, as a response to the public health emergency.
See FAQ 2.19.
• In communities where an increase in violence or increased difficulty in accessing or
providing services to respond to or mitigate the effects of violence, is a result of the
pandemic they may use funds to address that harm. This spending may include:
o Hiring law enforcement officials – even above pre-pandemic levels – or paying
overtime where the funds are directly focused on advancing community policing
strategies in those communities experiencing an increase in gun violence associated
with the pandemic
o Community Violence Intervention (CVI) programs, including capacity building
efforts at CVI programs like funding and training additional intervention workers
o Additional enforcement efforts to reduce gun violence exacerbated by the pandemic,
including prosecuting gun traffickers, dealers, and other parties contributing to the
supply of crime guns, as well as collaborative federal, state, and local efforts to
identify and address gun trafficking channels
o Investing in technology and equipment to allow law enforcement to more efficiently
and effectively respond to the rise in gun violence resulting from the pandemic
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As discussed in the Interim Final Rule, uses of CSFRF/CLFRF funds that respond to an
identified harm must be related and reasonably proportional to the extent and type of
harm experienced; uses that bear no relation or are grossly disproportionate to the type or
extent of harm experienced would not be eligible uses.
• Recipients may also use funds up to the level of revenue loss for government services,
including those outlined above.
Recognizing that the pandemic exacerbated mental health and substance use disorder needs
in many communities, eligible public health services include mental health and other
behavioral health services, which are a critical component of a holistic public safety
approach. This could include:
• Mental health services and substance use disorder services, including for individuals
experiencing trauma exacerbated by the pandemic, such as:
- Community-based mental health and substance use disorder programs that deliver
evidence-based psychotherapy, crisis support services, medications for opioid use
disorder, and/or recovery support
- School-based social-emotional support and other mental health services
• Referrals to trauma recovery services for crime victims.
Recipients also may use Funds to respond to the negative economic impacts of the public
health emergency, including:
• Assistance programs to households or populations facing negative economic impacts of
the public health emergency, including:
- Assistance to support economic security, including for the victims of crime;
- Housing assistance, including rent, utilities, and relocation assistance;
- Assistance with food, including Summer EBT and nutrition programs; and
- Employment or job training services to address negative economic or public
health impacts experienced due to a worker’s occupation or level of training.
• Assistance to unemployed workers, including:
- Subsidized jobs, including for young people. Summer youth employment
programs directly address the negative economic impacts of the pandemic on
young people and their families and communities;
- Programs that provide paid training and/or work experience targeted primarily to
(1) formerly incarcerated individuals, and/or (2) communities experiencing high
levels of violence exacerbated by the pandemic;
- Programs that provide workforce readiness training, apprenticeship or pre-
apprenticeship opportunities, skills development, placement services, and/or
coaching and mentoring; and
- Associated wraparound services, including for housing, health care, and food.
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Recognizing the disproportionate impact of the pandemic on certain communities, a broader
range of services are eligible in those communities than would otherwise be available in
communities not experiencing a pandemic-related increase in crime or gun violence. These
eligible uses aim to address the pandemic’s exacerbation of public health and economic
disparities and include services to address health and educational disparities, support
neighborhoods and affordable housing, and promote healthy childhood environments. The
Interim Final Rule provides a non-exhaustive list of eligible services in these categories.
These services automatically qualify as eligible uses when provided in Qualified Census
Tracts (QCTs), low-income areas designated by HUD; to families in QCTs; or by Tribal
governments. Outside of these areas, recipient governments can also identify and serve
households, populations, and geographic areas disproportionately impacted by the pandemic.
Services under this category could include:
• Programs or services that address or mitigate the impacts of the COVID-19 public health
emergency on education, childhood health and welfare, including:
o Summer education and enrichment programs in these communities, which include
many communities currently struggling with high levels of violence;
o Programs that address learning loss and keep students productively engaged;
o Enhanced services for foster youths and home visiting programs; and
o Summer camps and recreation.
• Programs or services that provide or facilitate access to health and social services and
address health disparities exacerbated by the pandemic. This includes Community
Violence Intervention (CVI) programs, such as:
o Evidence-based practices like focused deterrence, street outreach, violence
interrupters, and hospital-based violence intervention models, complete with
wraparound services such as behavioral therapy, trauma recovery, job training,
education, housing and relocation services, and financial assistance; and,
o Capacity-building efforts at CVI programs like funding more intervention workers;
increasing their pay; providing training and professional development for intervention
workers; and hiring and training workers to administer the programs.
Please refer to Treasury’s Interim Final Rule for additional information.
4.9. May recipients pool funds for regional projects? [7/14]
Yes, provided that the project is itself an eligible use of funds and that recipients can
track the use of funds in line with the reporting and compliance requirements of the
CSFRF/CLFRF. In general, when pooling funds for regional projects, recipients may
expend funds directly on the project or transfer funds to another government that is
undertaking the project on behalf of multiple recipients. To the extent recipients
undertake regional projects via transfer to another government, recipients would need to
comply with the rules on transfers specified in the Interim Final Rule, Section V. A
recipient may transfer funds to a government outside its boundaries (e.g., county transfers
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to a neighboring county), provided that the recipient can document that its jurisdiction
receives a benefit proportionate to the amount contributed.
4.10. May recipients fund a project with both ARP funds and other sources of funding
(e.g., blending, braiding, or other pairing funding sources), including in conjunction
with financing provided through a debt issuance? [7/14]
Cost sharing or matching funds are not required under CSFRF/CLFRF. Funds may be
used in conjunction with other funding sources, provided that the costs are eligible costs
under each source program and are compliant with all other related statutory and
regulatory requirements and policies. The recipient must comply with applicable
reporting requirements for all sources of funds supporting the CSFRF/CLFRF projects,
and with any requirements and restrictions on the use of funds from the supplemental
funding sources and the CSFRF/CLFRF program. Specifically,
• All funds provided under the CSFRF/CLFRF program must be used for projects,
investments, or services that are eligible under the CSFRF/CLFRF statute,
Treasury’s Interim Final Rule, and guidance. See 31 CFR 35.6-8; FAQ 4.6.
CSFRF/CLFRF funds may not be used to fund an activity that is not, in its
entirety, an eligible use under the CSFRF/CLFRF statute, Treasury’s Interim
Final Rule, and guidance. For example,
o CSFRF/CLFRF funds may be used in conjunction with other sources of
funds to make an investment in water infrastructure, which is eligible
under the CSLFRF statute, and Treasury’s Interim Final Rule.
o CSFRF/CLFRF funds could not be used to fund the entirety of a water
infrastructure project that was partially, although not entirely, an eligible
use under Treasury’s Interim Final Rule. However, the recipient could use
CSFRF/CLFRF funds only for a smaller component project that does
constitute an eligible use, while using other funds for the remaining
portions of the larger planned water infrastructure project that do not
constitute an eligible use. In this case, the “project” under this program
would be only the eligible use component of the larger project.
• In addition, because CSFRF/CLFRF funds must be obligated by December 31,
2024, and expended by December 31, 2026, recipients must be able to, at a
minimum, determine and report to Treasury on the amount of CSFRF/CLFRF
funds obligated and expended and when such funds were obligated and expended.
4.11. May Coronavirus State and Local Fiscal Recovery Funds be used to make loans or
other extensions of credit (“loans”), including loans to small businesses and loans to
finance necessary investments in water, sewer, and broadband infrastructure?
[7/14]
Yes. Coronavirus State and Local Fiscal Recovery Funds (“Funds”) may be used to
make loans, provided that the loan is an eligible use and the cost of the loan is tracked
and reported in accordance with the points below. See 31 CFR 35.6. For example, a
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recipient may use Coronavirus State and Local Fiscal Recovery Funds to make loans to
small businesses. See 31 CFR 35.6(b)(6). In addition, a recipient may use Funds to
finance a necessary investment in water, sewer or broadband, as described in the Interim
Final Rule. See 31 CFR 35.6(e).
Funds must be used to cover “costs incurred” by the recipient between March 3, 2021,
and December 31, 2024, and Funds must be expended by December 31, 2026. See
Section III.D of the Interim Final Rule; 31 CFR 35.5. Accordingly, recipients must be
able to determine the amount of Funds used to make a loan.
• For loans that mature or are forgiven on or before December 31, 2026, the recipient
must account for the use of funds on a cash flow basis, consistent with the approach
to loans taken in the Coronavirus Relief Fund.
o Recipients may use Fiscal Recovery Funds to fund the principal of the loan
and in that case must track repayment of principal and interest (i.e., “program
income,” as defined under 2 CFR 200).
o When the loan is made, recipients must report the principal of the loan as an
expense.
o Repayment of principal may be re-used only for eligible uses, and subject to
restrictions on timing of use of funds. Interest payments received prior to the
end of the period of performance will be considered an addition to the total
award and may be used for any purpose that is an eligible use of funds under
the statute and IFR. Recipients are not subject to restrictions under 2 CFR
200.307(e)(1) with respect to such payments.
• For loans with maturities longer than December 31, 2026, the recipient may use
Fiscal Recovery Funds for only the projected cost of the loan. Recipients may
estimate the subsidy cost of the loan, which equals the expected cash flows associated
with the loan discounted at the recipient’s cost of funding. A recipient’s cost of
funding can be determined based on the interest rates of securities with a similar
maturity to the cash flow being discounted that were either (i) recently issued by the
recipient or (ii) recently issued by a unit of state, local, or Tribal government similar
to the recipient. Recipients that have adopted the Current Expected Credit Loss
(CECL) standard may also treat the cost of the loan as equal to the CECL-based
expected credit losses over the life of the loan. Recipients may measure projected
losses either once, at the time the loan is extended, or annually over the covered
period.
Under either approach for measuring the amount of funds used to make loans with
maturities longer than December 31, 2026, recipients would not be subject to
restrictions under 2 CFR 200.307(e)(1) and need not separately track repayment of
principal or interest.
Any contribution of Fiscal Recovery Funds to a revolving loan fund must follow the
approach described above for loans with maturities longer than December 31, 2026. In
other words, a recipient could contribute Fiscal Recovery Funds to a revolving loan fund,
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provided that the revolving loan fund makes loans that are eligible uses and the Fiscal
Recovery Funds contributed represent the projected cost of loans made over the life of
the revolving loan fund.
4.12. May funds be used for outreach to increase uptake of federal assistance like the
Child Tax Credit or federal programs like SNAP? [7/14]
Yes. Eligible uses to address negative economic impacts include work “to improve
efficacy of programs addressing negative economic impacts, including through use of
data analysis, targeted consumer outreach, improvements to data or technology
infrastructure, and impact evaluations.” See 31 CFR 35.6(b)(10). Of note, per the
CSFRF/CLFRF Reporting Guidance, allowable use of funds for evaluations may also
include other types of program evaluations focused on program improvement and
evidence building. In addition, recipients may use funds to facilitate access to health and
social services in populations and communities disproportionately impacted by the
COVID-19 pandemic, including benefits navigators or marketing efforts to increase
consumer uptake of federal tax credits, benefits, or assistance programs that respond to
negative economic impacts of the pandemic. See 31 CFR 35.6(b)(12).
5. Eligible Uses – Premium Pay
5.1. What criteria should recipients use in identifying essential workers to receive
premium pay?
Essential workers are those in critical infrastructure sectors who regularly perform in-
person work, interact with others at work, or physically handle items handled by others.
Critical infrastructure sectors include healthcare, education and childcare, transportation,
sanitation, grocery and food production, and public health and safety, among others, as
provided in the Interim Final Rule. Governments receiving Fiscal Recovery Funds have
the discretion to add additional sectors to this list, so long as the sectors are considered
critical to protect the health and well-being of residents.
The Interim Final Rule emphasizes the need for recipients to prioritize premium pay for
lower income workers. Premium pay that would increase a worker’s total pay above
150% of the greater of the state or county average annual wage requires specific
justification for how it responds to the needs of these workers.
5.2. What criteria should recipients use in identifying third-party employers to receive
grants for the purpose of providing premium pay to essential workers?
Any third-party employers of essential workers are eligible. Third-party contractors who
employ essential workers in eligible sectors are also eligible for grants to provide
premium pay. Selection of third-party employers and contractors who receive grants is at
the discretion of recipients.
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To ensure any grants respond to the needs of essential workers and are made in a fair and
transparent manner, the rule imposes some additional reporting requirements for grants to
third-party employers, including the public disclosure of grants provided.
5.3. May recipients provide premium pay retroactively for work already performed?
Yes. Treasury encourages recipients to consider providing premium pay retroactively for
work performed during the pandemic, recognizing that many essential workers have not
yet received additional compensation for their service during the pandemic.
6. Eligible Uses – Water, Sewer, and Broadband Infrastructure
6.1. What types of water and sewer projects are eligible uses of funds?
The Interim Final Rule generally aligns eligible uses of the Funds with the wide range of
types or categories of projects that would be eligible to receive financial assistance
through the Environmental Protection Agency’s Clean Water State Revolving Fund
(CWSRF) or Drinking Water State Revolving Fund (DWSRF).
Under the DWSRF, categories of eligible projects include: treatment, transmission and
distribution (including lead service line replacement), source rehabilitation and
decontamination, storage, consolidation, and new systems development.
Under the CWSRF, categories of eligible projects include: construction of publicly-
owned treatment works, nonpoint source pollution management, national estuary
program projects, decentralized wastewater treatment systems, stormwater systems, water
conservation, efficiency, and reuse measures, watershed pilot projects, energy efficiency
measures for publicly-owned treatment works, water reuse projects, security measures at
publicly-owned treatment works, and technical assistance to ensure compliance with the
Clean Water Act.
As mentioned in the Interim Final Rule, eligible projects under the DWSRF and CWSRF
support efforts to address climate change, as well as to meet cybersecurity needs to
protect water and sewer infrastructure. Given the lifelong impacts of lead exposure for
children, and the widespread nature of lead service lines, Treasury also encourages
recipients to consider projects to replace lead service lines.
6.2. May construction on eligible water, sewer, or broadband infrastructure projects
continue past December 31, 2024, assuming funds have been obligated prior to that
date?
Yes. Treasury is interpreting the requirement that costs be incurred by December 31,
2024 to only require that recipients have obligated the funds by such date. The period of
performance will run until December 31, 2026, which will provide recipients a
reasonable amount of time to complete projects funded with Fiscal Recovery Funds.
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6.3. May recipients use funds as a non-federal match for the Clean Water State
Revolving Fund (CWSRF) or Drinking Water State Revolving Fund (DWSRF)?
Recipients may not use funds as a state match for the CWSRF and DWSRF due to
prohibitions in utilizing federal funds as a state match in the authorizing statutes and
regulations of the CWSRF and DWSRF.
6.4. Does the National Environmental Policy Act (NEPA) apply to eligible infrastructure
projects?
NEPA does not apply to Treasury’s administration of the Funds. Projects supported with
payments from the Funds may still be subject to NEPA review if they are also funded by
other federal financial assistance programs.
6.5. What types of broadband projects are eligible?
The Interim Final Rule requires eligible projects to reliably deliver minimum speeds of
100 Mbps download and 100 Mbps upload. In cases where it is impracticable due to
geography, topography, or financial cost to meet those standards, projects must reliably
deliver at least 100 Mbps download speed, at least 20 Mbps upload speed, and be
scalable to a minimum of 100 Mbps download speed and 100 Mbps upload speed.
Projects must also be designed to serve unserved or underserved households and
businesses, defined as those that are not currently served by a wireline connection that
reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed.
6.6. For broadband investments, may recipients use funds for related programs such as
cybersecurity or digital literacy training?
Yes. Recipients may use funds to provide assistance to households facing negative
economic impacts due to Covid-19, including digital literacy training and other programs
that promote access to the Internet. Recipients may also use funds for modernization of
cybersecurity, including hardware, software, and protection of critical infrastructure, as
part of provision of government services up to the amount of revenue lost due to the
public health emergency.
6.7. How do I know if a water, sewer, or broadband project is an eligible use of funds?
Do I need pre-approval? [6/8]
Recipients do not need approval from Treasury to determine whether an investment in a
water, sewer, or broadband project is eligible under CSFRF/CLFRF. Each recipient
should review the Interim Final Rule (IFR), along with the preamble to the Interim Final
Rule, in order to make its own assessment of whether its intended project meets the
eligibility criteria in the IFR. A recipient that makes its own determination that a project
meets the eligibility criteria as outlined in the IFR may pursue the project as a
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CSFRF/CLFRF project without pre-approval from Treasury. Local government
recipients similarly do not need state approval to determine that a project is eligible under
CSFRF/CLFRF. However, recipients should be cognizant of other federal or state laws
or regulations that may apply to construction projects independent of CSFRF/CLFRF
funding conditions and that may require pre-approval.
For water and sewer projects, the IFR refers to the EPA Drinking Water and Clean Water
State Revolving Funds (SRFs) for the categories of projects and activities that are eligible
for funding. Recipients should look at the relevant federal statutes, regulations, and
guidance issued by the EPA to determine whether a water or sewer project is eligible. Of
note, the IFR does not incorporate any other requirements contained in the federal
statutes governing the SRFs or any conditions or requirements that individual states may
place on their use of SRFs.
6.8. For broadband infrastructure investments, what does the requirement that
infrastructure “be designed to” provide service to unserved or underserved
households and businesses mean? [6/17]
Designing infrastructure investments to provide service to unserved or underserved
households or businesses means prioritizing deployment of infrastructure that will bring
service to households or businesses that are not currently serviced by a wireline
connection that reliably delivers at least 25 Mbps download speed and 3 Mbps of upload
speed. To meet this requirement, states and localities should use funds to deploy
broadband infrastructure projects whose objective is to provide service to unserved or
underserved households or businesses. These unserved or underserved households or
businesses do not need to be the only ones in the service area funded by the project.
6.9. For broadband infrastructure to provide service to “unserved or underserved
households or businesses,” must every house or business in the service area be
unserved or underserved? [6/17]
No. It suffices that an objective of the project is to provide service to unserved or
underserved households or businesses. Doing so may involve a holistic approach that
provides service to a wider area in order, for example, to make the ongoing service of
unserved or underserved households or businesses within the service area economical.
Unserved or underserved households or businesses need not be the only households or
businesses in the service area receiving funds.
6.10. May recipients use payments from the Funds for “middle mile” broadband
projects? [6/17]
Yes. Under the Interim Final Rule, recipients may use payments from the Funds for
“middle-mile projects,” but Treasury encourages recipients to focus on projects that will
achieve last-mile connections—whether by focusing on funding last-mile projects or by
ensuring that funded middle-mile projects have potential or partnered last-mile networks
that could or would leverage the middle-mile network.
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6.11. For broadband infrastructure investments, what does the requirement to “reliably”
meet or exceed a broadband speed threshold mean? [6/17]
In the Interim Final Rule, the term “reliably” is used in two places: to identify areas that
are eligible to be the subject of broadband infrastructure investments and to identify
expectations for acceptable service levels for broadband investments funded by the
Coronavirus State and Local Fiscal Recovery Funds. In particular:
• The IFR defines “unserved or underserved households or businesses” to mean one
or more households or businesses that are not currently served by a wireline
connection that reliably delivers at least 25 Mbps download speeds and 3 Mbps of
upload speeds.
• The IFR provides that a recipient may use Coronavirus State and Local Fiscal
Recovery Funds to make investments in broadband infrastructure that are
designed to provide service to unserved or underserved households or businesses
and that are designed to, upon completion: (i) reliably meet or exceed
symmetrical 100 Mbps download speed and upload speeds; or (ii) in limited
cases, reliably meet or exceed 100 Mbps download speed and between 20 Mbps
and 100 Mbps upload speed and be scalable to a minimum of 100 Mbps download
and upload speeds.
The use of “reliably” in the IFR provides recipients with significant discretion to assess
whether the households and businesses in the area to be served by a project have access
to wireline broadband service that can actually and consistently meet the specified
thresholds of at least 25Mbps/3Mbps—i.e., to consider the actual experience of current
wireline broadband customers that subscribe to services at or above the 25 Mbps/3 Mbps
threshold. Whether there is a provider serving the area that advertises or otherwise
claims to offer speeds that meet the 25 Mbps download and 3 Mbps upload speed
thresholds is not dispositive.
When making these assessments, recipients may choose to consider any available data,
including but not limited to documentation of existing service performance, federal
and/or state-collected broadband data, user speed test results, interviews with residents
and business owners, and any other information they deem relevant. In evaluating such
data, recipients may take into account a variety of factors, including whether users
actually receive service at or above the speed thresholds at all hours of the day, whether
factors other than speed such as latency or jitter, or deterioration of the existing
connections make the user experience unreliable, and whether the existing service is
being delivered by legacy technologies, such as copper telephone lines (typically using
Digital Subscriber Line technology) or early versions of cable system technology
(DOCSIS 2.0 or earlier).
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The IFR also provides recipients with significant discretion as to how they will assess
whether the project itself has been designed to provide households and businesses with
broadband services that meet, or even exceed, the speed thresholds provided in the rule.
6.12. May recipients use Funds for pre-project development for eligible water, sewer, and
broadband projects? [6/23]
Yes. To determine whether Funds can be used on pre-project development for an eligible
water or sewer project, recipients should consult whether the pre-project development use
or cost is eligible under the Drinking Water and Clean Water State Revolving Funds
(CWSRF and DWSRF, respectively). Generally, the CWSRF and DWSRF often allow
for pre-project development costs that are tied to an eligible project, as well as those that
are reasonably expected to lead to a project. For example, the DWSRF allows for
planning and evaluations uses, as well as numerous pre-project development costs,
including costs associated with obtaining project authorization, planning and design, and
project start-up like training and warranty for equipment. Likewise, the CWSRF allows
for broad pre-project development, including planning and assessment activities, such as
cost and effectiveness analyses, water/energy audits and conservation plans, and capital
improvement plans.
Similarly, pre-project development uses and costs for broadband projects should be tied
to an eligible broadband project or reasonably expected to lead to such a project. For
example, pre-project costs associated with planning and engineering for an eligible
broadband infrastructure build-out is considered an eligible use of funds, as well as
technical assistance and evaluations that would reasonably be expected to lead to
commencement of an eligible project (e.g., broadband mapping for the purposes of
finding an eligible area for investment).
All funds must be obligated within the statutory period between March 3, 2021 and
December 31, 2024, and expended to cover such obligations by December 31, 2026.
6.13. May State and Local Fiscal Recovery Funds be used to support energy or
electrification infrastructure that would be used to power new water treatment
plants and wastewater systems? [7/14]
The EPA’s Overview of Clean Water State Revolving Fund Eligibilities describes
eligible energy-related projects. This includes a “[p]ro rata share of capital costs of
offsite clean energy facilities that provide power to a treatment works.” Thus, State and
Local Fiscal Recovery Funds may be used to finance the generation and delivery of clean
power to a wastewater system or a water treatment plant on a pro-rata basis. If the
wastewater system or water treatment plant is the sole user of the clean energy, the full
cost would be considered an eligible use of funds. If the clean energy provider provides
power to other entities, only the proportionate share used by the water treatment plant or
wastewater system would be an eligible use of State and Local Fiscal Recovery Funds.
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6.14. How should states and local governments assess whether a stormwater management
project, such as a culvert replacement, is an eligible project for State and Local
Fiscal Recovery Funds? [7/14]
FAQ 6.7 describes the overall approach that recipients may take to evaluate the eligibility
of water or sewer projects. For stormwater management projects specifically, as noted in
the EPA’s Overview of Clean Water State Revolving Fund Eligibilities, “Stormwater
projects must have a water quality benefit.” Thus, to be eligible under CSFRF/CLFRF,
stormwater management projects should be designed to incorporate water quality benefits
consistent with the goals of the Clean Water Act. Summary of the Clean Water Act.
6.15. May recipients use Funds for road repairs and upgrades that occur in connection
with an eligible water or sewer project? [7/14]
Yes, recipients may use State and Local Fiscal Recovery Funds for road repairs and
upgrades directly related to an eligible water or sewer project. For example, a recipient
could use Funds to repair or re-pave a road following eligible sewer repair work beneath
it. However, use of Funds for general infrastructure projects is subject to the limitations
described in FAQ 4.2. Water and sewer infrastructure projects are often a single
component of a broader transportation infrastructure project, for example, the
implementation of stormwater infrastructure to meet Clean Water Act established water
quality standards. In this example, the components of the infrastructure project that
interact directly with the stormwater infrastructure project may be funded by Fiscal
Recovery Funds.
6.16. May Funds be used to build or upgrade broadband connections to schools or
libraries? [7/14]
As outlined in the IFR, recipients may use Fiscal Recovery Funds to invest in broadband
infrastructure that, wherever it is practicable to do so, is designed to deliver service that
reliably meets or exceeds symmetrical upload and download speeds of 100 Mbps to
households or businesses that are not currently serviced by a wireline connection that
reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed. Treasury
interprets “businesses” in this context broadly to include non-residential users of
broadband, including private businesses and institutions that serve the public, such as
schools, libraries, healthcare facilities, and public safety organizations.
6.17. Are eligible infrastructure projects subject to the Davis-Bacon Act? [7/14]
The Davis-Bacon Act requirements (prevailing wage rates) do not apply to projects
funded solely with award funds from the CSFRF/CLFRF program, except for
CSFRF/CLFRF-funded construction projects undertaken by the District of Columbia.
The Davis-Bacon Act specifically applies to the District of Columbia when it uses federal
funds (CSFRF/CLFRF funds or otherwise) to enter into contracts over $2,000 for the
construction, alteration, or repair (including painting and decorating) of public buildings
or public works. Recipients may be otherwise subject to the requirements of the Davis-
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Bacon Act, when CSFRF/CLFRF award funds are used on a construction project in
conjunction with funds from another federal program that requires enforcement of the
Davis-Bacon Act. Additionally, corollary state prevailing-wage-in-construction laws
(commonly known as “baby Davis-Bacon Acts”) may apply to projects. Please refer to
FAQ 4.10 concerning projects funded with both CSFRF/CLFRF funds and other sources
of funding.
Treasury has indicated in its Interim Final Rule that it is important that necessary
investments in water, sewer, or broadband infrastructure be carried out in ways that
produce high-quality infrastructure, avert disruptive and costly delays, and promote
efficiency. Treasury encourages recipients to ensure that water, sewer, and broadband
projects use strong labor standards, including project labor agreements and community
benefits agreements that offer wages at or above the prevailing rate and include local hire
provisions, not only to promote effective and efficient delivery of high-quality
infrastructure projects, but also to support the economic recovery through strong
employment opportunities for workers. Using these practices in construction projects
may help to ensure a reliable supply of skilled labor that would minimize disruptions,
such as those associated with labor disputes or workplace injuries.
Treasury has also indicated in its reporting guidance that recipients will need to provide
documentation of wages and labor standards for infrastructure projects over $10 million,
and that that these requirements can be met with certifications that the project is in
compliance with the Davis-Bacon Act (or related state laws, commonly known as “baby
Davis-Bacon Acts”) and subject to a project labor agreement. Please refer to the
Reporting and Compliance Guidance, page 21, for more detailed information on the
reporting requirement.
7. Non-Entitlement Units (NEUs)
Answers to frequently asked questions on distribution of funds to NEUs can be found in
this FAQ supplement, which is regularly updated.
8. Ineligible Uses
8.1. What is meant by a pension “deposit”? Can governments use funds for routine
pension contributions for employees whose payroll and covered benefits are eligible
expenses?
Treasury interprets “deposit” in this context to refer to an extraordinary payment into a
pension fund for the purpose of reducing an accrued, unfunded liability. More
specifically, the interim final rule does not permit this assistance to be used to make a
payment into a pension fund if both: (1) the payment reduces a liability incurred prior to
the start of the COVID-19 public health emergency, and (2) the payment occurs outside
the recipient’s regular timing for making such payments.
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Under this interpretation, a “deposit” is distinct from a “payroll contribution,” which
occurs when employers make payments into pension funds on regular intervals, with
contribution amounts based on a pre-determined percentage of employees’ wages and
salaries. In general, if an employee’s wages and salaries are an eligible use of Fiscal
Recovery Funds, recipients may treat the employee’s covered benefits as an eligible use
of Fiscal Recovery Funds.
8.2. May recipients use Fiscal Recovery Funds to fund Other Post-Employment Benefits
(OPEB)? [6/8]
OPEB refers to benefits other than pensions (see, e.g., Governmental Accounting
Standards Board, “Other Post-Employment Benefits”). Treasury has determined that
Sections 602(c)(2)(B) and 603(c)(2), which refer only to pensions, do not prohibit
CSFRF/CLFRF recipients from funding OPEB. Recipients of either the CSFRF/CLFRF
may use funds for eligible uses, and a recipient seeking to use CSFRF/CLFRF funds for
OPEB contributions would need to justify those contributions under one of the four
eligible use categories.
9. Reporting
On November 5, 2021, Treasury released updated Guidance on Recipient Compliance and
Reporting Responsibilities for the Coronavirus State and Local Fiscal Recovery Funds.
Recipients should consult this guidance for additional detail and clarification on recipients’
compliance and reporting responsibilities. A user guide will be provided with additional
information associated with the submission of reports. .
9.1. What records must be kept by governments receiving funds?
Financial records and supporting documents related to the award must be retained for a
period of five years after all funds have been expended or returned to Treasury,
whichever is later. This includes those which demonstrate the award funds were used for
eligible purposes in accordance with the ARPA, Treasury’s regulations implementing
those sections, and Treasury’s guidance on eligible uses of funds.
9.2. What reporting will be required, and when will the first report be due?2
Recipients will be required to submit an interim report, project and expenditure reports,
and annual Recovery Plan Performance Reports as specified below, regarding their
utilization of Coronavirus State and Local Fiscal Recovery Funds.
Interim reports: States (defined to include the District of Columbia), territories,
metropolitan cities, counties, and Tribal governments will be required to submit one
2
This question was updated on November 15, 2021
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interim report. The interim report will include a recipient’s expenditures by category at
the summary level and for states, information related to distributions to non-entitlement
units of local government must also be included in the interim report. The interim report
covered activity from the date of award to July 31, 2021 and were due to Treasury by
August 31, 2021 or 60 days after receiving funding if funding was received by October
15, 2021. Non-entitlement units of local government were not required to submit an
interim report.
Project and Expenditure reports: State (defined to include the District of Columbia),
territorial, metropolitan city, county, and Tribal governments will be required to submit
project and expenditure reports. This report will include financial data, information on
contracts and subawards over $50,000, types of projects funded, and other information
regarding a recipient’s utilization of award funds.
Reports will be required quarterly for the following recipients:
• States and territories
• Metropolitan cities and counties with population over 250,000
• Metropolitan cities and counties with population less than 250,000 that received
an award of more than $10 million
• Tribal governments that received an award of more than $30 million.
The initial project and expenditure report for quarterly recipients will be due January 31,
2022 and will cover the period of March 3, 2021 to December 31, 2021. The subsequent
quarterly reports will cover one calendar quarter and must be submitted to Treasury
within 30 days after the end of each calendar quarter.
Reports will be required annually for the following recipients:
• Metropolitan cities and counties with population less than 250,000 that received
an award less than $10 million,
• Tribal governments that received an award less than $30 million
• Non-entitlement units of government
The initial project and expenditure report for annual filers will be due April 30, 2022 and
will cover the period of March 3, 2021 to March 31, 2022. The subsequent annual
reports must be submitted to Treasury by April 30 each year.
The reports will include the same general data as those submitted by recipients of the
Coronavirus Relief Fund, with some modifications to expenditure categories and the
addition of data elements related to specific eligible uses.
Recovery Plan Performance Reports: States (defined to include the District of Columbia),
territories, metropolitan cities, and counties with a population that exceeds 250,000
residents will also be required to submit an annual Recovery Plan Performance Report to
Treasury. This report will include descriptions of the projects funded and information on
the performance indicators and objectives of each award, helping local residents
understand how their governments are using the substantial resources provided by
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Coronavirus State and Local Fiscal Recovery Funds program. The initial Recovery Plan
Performance Report will cover activity from date of award to July 31, 2021 was due to
Treasury by August 31, 2021 or 60 days after receiving funding. Thereafter, the
Recovery Plan Performance Reports will cover a 12-month period and recipients will be
required to submit the report to Treasury within 30 days after the end of the 12-month
period. The second Recovery Plan Performance Report will cover the period from July 1,
2021 to June 30, 2022 and must be submitted to Treasury by July 31, 2022. Each annual
Recovery Plan Performance Report must be posted on the public-facing website of the
recipient. Local governments with fewer than 250,000 residents, Tribal governments,
and non-entitlement units of local government are not required to develop a Recovery
Plan Performance Report.
Please see the Guidance on Recipient Compliance and Reporting Responsibilities for
more information.
9.3. What provisions of the Uniform Guidance for grants apply to these funds? Will the
Single Audit requirements apply?
Most of the provisions of the Uniform Guidance (2 CFR Part 200) apply to this program,
including the Cost Principles and Single Audit Act requirements. Recipients should refer
to the Assistance Listing for detail on the specific provisions of the Uniform Guidance
that do not apply to this program. The Assistance Listing will be available on
beta.SAM.gov.
9.4. Once a recipient has identified a reduction in revenue, how will Treasury track use
of funds for the provision of government services? [6/8]
The ARPA establishes four categories of eligible uses and further restrictions on the use
of funds to ensure that Fiscal Recovery Funds are used within the four eligible use
categories. The Interim Final Rule implements these restrictions, including the scope of
the eligible use categories and further restrictions on tax cuts and deposits into
pensions. Reporting requirements will align with this structure.
Consistent with the broad latitude provided to recipients to use funds for government
services to the extent of the reduction in revenue, recipients will be required to submit a
description of services provided. As discussed in IFR, these services can include a broad
range of services but may not be used directly for pension deposits, contributions to
reserve funds, or debt service. Recipients may use sources of funding other than Fiscal
Recovery Funds to make deposits to pension funds, contribute to reserve funds, and pay
debt service, including during the period of performance for the Fiscal Recovery Fund
award.
For recipients using Fiscal Recovery Funds to provide government services to the extent
of reduction in revenue, the description of government services reported to Treasury may
be narrative or in another form, and recipients are encouraged to report based on their
existing budget processes and to minimize administrative burden. For example, a
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recipient with $100 in revenue replacement funds available could indicate that $50 were
used for personnel costs and $50 were used for pay-go building of sidewalk
infrastructure.
In addition to describing the government services provided to the extent of reduction in
revenue, all recipients will also be required to indicate that Fiscal Recovery Funds are not
used directly to make a deposit in a pension fund. Further, recipients subject to the tax
offset provision will be required to provide information necessary to implement the
Interim Final Rule, as described in the Interim Final Rule. Treasury does not anticipate
requiring other types of reporting or recordkeeping on spending in pensions, debt service,
or contributions to reserve funds.
These requirements are further detailed in the guidance on reporting requirements for the
Fiscal Recovery Funds available here.
9.5. What is the Assistance Listing and Catalog of Federal Domestic Assistance (CFDA)
number for the program? [6/8]
The Assistance Listing for the Coronavirus State and Local Fiscal Recovery Funds
(CSLFRF) was published May 28, 2021 on SAM.gov. This includes the final CFDA
Number for the program, 21.027.
The assistance listing includes helpful information including program purpose, statutory
authority, eligibility requirements, and compliance requirements for recipients. The
CFDA number is the unique 5-digit code for each type of federal assistance, and can be
used to search for program information, including funding opportunities, spending on
usaspending.gov, or audit results through the Federal Audit Clearinghouse.
To expedite payments and meet statutory timelines, Treasury issued initial payments
under an existing CFDA number. If you have already received funds or captured the
initial CFDA number in your records, please update your systems and reporting to reflect
the final CFDA number 21.027. Recipients must use the final CFDA number for all
financial accounting, audits, subawards, and associated program reporting
requirements.
To ensure public trust, Treasury expects all recipients to serve as strong stewards of these
funds. This includes ensuring funds are used for intended purposes and recipients have in
place effective financial management, internal controls, and reporting for transparency
and accountability.
Please see Treasury’s Interim Final Rule and the Guidance on Recipient Compliance and
Reporting Responsibilities for more information.
10. Miscellaneous
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10.1. May governments retain assets purchased with Fiscal Recovery Funds? If so, what
rules apply to the proceeds of disposition or sale of such assets?
Yes, if the purchase of the asset was consistent with the limitations on the eligible use of
funds. If such assets are disposed of prior to December 31, 2024, the proceeds would be
subject to the restrictions on the eligible use of payments.
10.2. Can recipients use funds for administrative purposes?
Recipients may use funds to cover the portion of payroll and benefits of employees
corresponding to time spent on administrative work necessary due to the COVID–19
public health emergency and its negative economic impacts. This includes, but is not
limited to, costs related to disbursing payments of Fiscal Recovery Funds and managing
new grant programs established using Fiscal Recovery Funds.
10.3. Are recipients required to remit interest earned on CSFRF/CLFRF payments made
by Treasury? [5/27, updated 7/14]
No. CSFRF/CLFRF payments made by Treasury to states, territories, and the District of
Columbia are not subject to the requirement of the Cash Management Improvement Act
and Treasury’s implementing regulations at 31 CFR part 205 to remit interest to
Treasury. CSFRF/CLFRF payments made by Treasury to local governments and Tribes
are not subject to the requirement of 2 CFR 200.305(b)(8)–(9) to maintain balances in an
interest-bearing account and remit payments to Treasury. Moreover, interest earned on
CSFRF/CLFRF payments is not subject to program restrictions. Finally, States may
retain interest on payments made by Treasury to the State for distribution to NEUs that is
earned before funds are distributed to NEUs, provided that the State adheres to the
statutory requirements and Treasury’s guidance regarding the distribution of funds to
NEUs. Such interest is also not subject to program restrictions.
Among other things, States and other recipients may use earned income to defray the
administrative expenses of the program, including with respect to NEUs.
10.4. Is there a deadline to apply for funds? [5/27]
The Interim Final Rule requires that costs be incurred by December 31, 2024. Direct
recipients are encouraged to apply as soon as possible. For direct recipients other than
Tribal governments, there is not a specific application deadline.
Tribal governments do have deadlines to complete the application process and should
visit www.treasury.gov/SLFRPTribal for guidance on applicable deadlines.
Non-entitlement units of local government should contact their state government for
information on applicable deadlines.
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AS OF JULY 2023
10.5. May recipients use funds to cover the costs of consultants to assist with managing
and administering the funds? [6/8]
Yes. Recipients may use funds for administering the CSFRF/CLFRF program, including
costs of consultants to support effective management and oversight, including
consultation for ensuring compliance with legal, regulatory, and other requirements.
11. Operations
11.1. How do I know if my entity is eligible?
The Coronavirus State and Local Fiscal Recovery Funds American Rescue Plan Act of
2021 set forth the jurisdictions eligible to receive funds under the program, which are:
• States and the District of Columbia
• Territories
• Tribal governments
• Counties
• Metropolitan cities (typically, but not always, those with populations over 50,000)
• Non-entitlement units of local government, or smaller local governments
(typically, but not always, those with populations under 50,000)
11.2. How does an eligible entity request payment?
Eligible entities (other than non-entitlement units) must submit their information to the
Treasury Submission Portal. Please visit the Coronavirus State and Local Fiscal
Recovery Fund website for more information on the submission process.
11.3. I cannot log into the Treasury Submission Portal or am having trouble navigating
it. Who can help me?
If you have questions about the Treasury Submission Portal or for technical support,
please email covidreliefitsupport@treasury.gov.
11.4. What do I need to do to receive my payment?
All eligible payees are required to have a DUNS Number previously issued by Dun &
Bradstreet (https://www.dnb.com/).
All eligible payees are also required to have an active registration with the System for
Award Management (SAM) (https://www.sam.gov).
And eligible payees must have a bank account enabled for Automated Clearing House
(ACH) direct deposit. Payees with a Wire account are encouraged to provide that
information as well.
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AS OF JULY 2023
More information on these and all program pre-submission requirements can be found on
the Coronavirus State and Local Fiscal Recovery Fund website.
11.5. Why is Treasury employing id.me for the Treasury Submission Portal?
ID.me is a trusted technology partner to multiple government agencies and healthcare
providers. It provides secure digital identity verification to those government agencies
and healthcare providers to make sure you're you – and not someone pretending to be you
– when you request access to online services. All personally identifiable information
provided to ID.me is encrypted and disclosed only with the express consent of the user.
Please refer to ID.me Contact Support for assistance with your ID.me account. Their
support website is https://help.id.me.
11.6. Why is an entity not on the list of eligible entities in Treasury Submission Portal?
The ARPA statute lays out which governments are eligible for payments. The list of
entities within the Treasury Submission Portal includes entities eligible to receive a direct
payment of funds from Treasury, which include states (defined to include the District of
Columbia), territories, Tribal governments, counties, and metropolitan cities.
Eligible non-entitlement units of local government will receive a distribution of funds
from their respective state government and should not submit information to the Treasury
Submission Portal.
If you believe an entity has been mistakenly left off the eligible entity list, please email
SLFRP@treasury.gov.
11.7. What is an Authorized Representative?
An Authorized Representative is an individual with legal authority to bind the
government entity (e.g., the Chief Executive Officer of the government entity). An
Authorized Representative must sign the Acceptance of Award terms for it to be valid.
11.8. How does a Tribal government determine their allocation?
Tribal governments will receive information about their allocation when the submission
to the Treasury Submission Portal is confirmed to be complete and accurate.
11.9. How do I know the status of my request for funds (submission)?
Entities can check the status of their submission at any time by logging into Treasury
Submission Portal.
11.10. My Treasury Submission Portal submission requires additional
information/correction. What is the process for that?
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AS OF JULY 2023
If your Authorized Representative has not yet signed the award terms, you can edit your
submission with in the into Treasury Submission Portal. If your Authorized
Representative has signed the award terms, please email SLFRP@treasury.gov to request
assistance with updating your information.
11.11. My request for funds was denied. How do I find out why it was denied or appeal the
decision?
Please check to ensure that no one else from your entity has applied, causing a duplicate
submission. Please also review the list of all eligible entities on the Coronavirus State
and Local Fiscal Recovery Fund website.
If you still have questions regarding your submission, please email
SLFRP@treasury.gov.
11.12. When will entities get their money?
Before Treasury is able to execute a payment, a representative of an eligible government
must submit the government’s information for verification through the Treasury
Submission Portal. The verification process takes approximately four business days. If
any errors are identified, the designated point of contact for the government will be
contacted via email to correct the information before the payment can proceed. Once
verification is complete, the designated point of contact of the eligible government will
receive an email notifying them that their submission has been verified. Payments are
generally scheduled for the next business day after this verification email, though funds
may not be available immediately due to processing time of their financial institution.
11.13. How does a local government entity provide Treasury with a notice of transfer of
funds to its State?
For more information on how to provide Treasury with notice of transfer to a state, please
email SLRedirectFunds@treasury.gov.
12. Tribal Governments
12.1. Do Treasury’s pandemic recovery program awards terms and conditions impose
civil rights laws on Tribes?
The award terms and conditions for Treasury’s pandemic recovery programs, including the
CSFRF, do not impose antidiscrimination requirements on Tribal governments beyond what
would otherwise apply under federal law. Treasury is amending its reporting requirements with
respect to the CSFRF, Treasury’s Emergency Rental Assistance Program, and Homeowner
Assistance Fund to reflect this clarification.
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Appendix: Interim Final Rule Definition of General Revenue Within the Census Bureau Classification Structure of Revenue
Revenue is Net of Refunds and Other Correcting Transactions, and Excludes:
-Intragovernmental transfers
Revenue -Proceeds from issuance of debt
-Proceeds from the sale of investments
-Proceeds from agency or private trust transactions
Liquor Store Social Insurance Trust
General Revenue Revenue Utility Revenue Tribal Enterprise Revenue*
Revenue
*While Tribal Enterprise Revenue is not
Intergovernmental within the scope of the Census Bureau’s
General Revenue from Specifically includes revenues from electric power systems,
gas power systems, public mass transit systems, and water Annual Survey of State and Local
Revenue Own Sources supply systems. Government Finances, Tribal governments
may include enterprise revenue in calculating
revenue loss under the Interim Final Rule.
From the From the From Local Current Tax Miscellanous
Federal State Governments Charges Revenue General Revenue
Government Government Examples. Revenues From:
Public Employee Retirement Systems
Examples. Revenues From: Examples. Revenues From: Unemployment Compensation Systems
-Airports -Dividends or Interest Workers' Compensation Systems
Examples. Revenues From:
-Education Institutions (K-12 or Earnings Other State or Local Social Insurance Programs
-Alcoholic Beverage License or Sales Taxes
Higher Ed) -Donations from Private
-Amusements License or Sales Taxes Sources
-Highways or Tolls
-Corporate Income Taxes -Fines and Forfeits
-Public Hospitals
-Corporate License Taxes -Lottery
-Public Housing
-Death and Gift Taxes -Rents
-Natural Resources
-Documentary and Stock Transfer Taxes -Royalties
-Parking Facilities
-General Sales and Gross Receipts Taxes -Sale of Property
-Parks and Recreation
-Individual Income Taxes -Special Assessments
-Ports
-Insurance Premium Sales Taxes
-Sewer or Solid Waste Systems
-Hunting and Fishing License Taxes
-Motor Fuels Sales Taxes
-Motor Vehicle License Taxes
-Motor Vehicle Operations License Taxes
-Occupation and Business License Taxes
-Pari-mutuels Sales Taxes
-Property Taxes Legend
-Public Utilities License or Sales Taxes
Included in the Interim Final Rule Definition of General Revenue
-Severance Taxes
-Tobacco Products Sales Taxes Excluded from the Interim Final Rule Definition of General Revenue
Source: U.S. Bureau of the Census Government Finance and Employment Classification Manual, 2006; Annual Survey of State and Local Government Finances
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