The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program designates funds from the American Rescue Plan Act (ARPA) to provide assistance to state, local and Tribal governments dealing with the effects of COVID-19. On January 6, 2022, the U.S. Treasury issued the Final Rule for SLFRF, which becomes effective April 1, 2022. Regardless of when funds were used, the U.S. Treasury will not take action to enforce the previously issued Interim Final Rule as long as a recipient utilizes SLFRF funds in a matter consistent with the Final Rule.
Key Changes from the Interim Rule to the Final Rule
There are a number of changes reflected in the Final Rule that will impact how recipients can use funds. The most significant of the changes are discussed below.
Replacement of Lost Public Sector Revenue
Previously, public sector recipients were required to calculate their revenue loss attributed to COVID-19 using the formula issued by the U.S. Treasury. Under the Final Rule, recipients have the option to select a standard allowance of up to $10 million (not to exceed the award amount) or complete a full revenue loss calculation. Selection of the standard allowance does not impact the recipient’s total allocation.
Public Health and Economic Impacts
The Final Rule states that funds can be used for capital expenditures that support an eligible COVID-19 public health or economic response, in addition to programs and services.
Disproportionately Impacted Communities
The Final Rule expands the set of households, populations, or classes (i.e., groups) presumed to be “impacted” and “disproportionately impacted” by COVID-19. Recipients of funds can provide responses to these groups in line with eligible uses, as defined by the U.S. Treasury. Recipients can additionally identify other populations or groups (beyond those presumed eligible) and other programs, services or capital expenditures (beyond those enumerated).
The Final Rule broadens the share of eligible workers who can receive premium pay without a written justification. Focus is maintained on lower-income and frontline workers performing essential work.
Water, Sewer and Broadband Infrastructure
In order to address challenges with broadband access, affordability and reliability, the Final Rule expands eligible broadband infrastructure investments. The Final Rule also includes a broader range of eligible water and sewer infrastructure investments, including lead remediation to support access to clean drinking water and improve and maintain vital wastewater and stormwater infrastructure.