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COVID-19 Federal Assistance e311

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Timing of Funds

How will the “use of funds” category authorizing spending of ARP funds “to respond to the public health emergency with respect to COVID–19 or its negative economic impacts, including assistance to households, small businesses, and nonprofits…” be defined?

In defining eligible use of funds, the American Rescue Plan Act of 2021 (“ARP”) permits use of payments from the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) to respond to the public health emergency and negative economic impacts of COVID-19.[1] Generally, the U.S. Department of the Treasury (“Treasury”) places the burden of assessing whether a program meets this requirement on recipients.

Treasury’s Final Rule provides a non-exclusive list of how funds may be used to address the public health emergency, including: COVID-19 mitigation and prevention, medical expenses, behavioral health care, and preventing and responding to violence. Examples of eligible uses can be found in Treasury’s Overview of the Final Rule, and the public is considered impacted for the purposes of the above responses to the public health emergency.[2]

In considering whether a program or service responds to the negative economic impacts of the public health emergency, Treasury states that a recipient should consider whether: (i) economic harm exists; (ii) this harm was caused or made worse by the COVID-19 public health emergency; and (iii) the proposed program or service responds to this negative economic impact.[3] Negative economic impacts that are not related to the COVID-19 public health emergency are not eligible.[4] Treasury further notes that programs and services must be related and reasonably proportional to the extent and type of harm experienced.[5]

Treasury’s Final Rule includes various examples of programs that respond to the negative economic impacts of the public health emergency. It is important to note that these examples are clearly identified as non-exclusive and other programs may be considered eligible using Treasury’s evaluation criteria.[6] Examples include, but are not limited to:

  • Assistance to households in addressing:
    • food assistance;
    • emergency housing assistance;
    • health insurance coverage expansion;
    • benefits for surviving family members of individuals who have died from COVID-19;
    • assistance to individuals who want and are available for work;
    • financial services for the unbanked and underbanked;
    • burials, home repair & home weatherization;
    • programs, devices & equipment for internet access and digital literacy, including subsidies for costs of access;
    • cash assistance;
    • paid sick, medical, and family leave programs;
    • assistance in accessing and applying for public benefits or services;
    • childcare and early learning services, home visiting programs, services for child welfare involved families and foster youth & childcare facilities;
    • assistance to address the impact of learning loss for K-12 students;
    • programs or services to support long-term housing security; and
    • certain contributions to an Unemployment Insurance Trust Fund; [7]:
  • Assistance to small businesses, nonprofits, or impacted industries, such as:
    • loans or grants to mitigate financial hardship such as by supporting payroll and benefits, costs to retain employees, and mortgage, rent, utility, and other operating costs;
    • support of operations and maintenance of existing equipment and facilities (impacted industries only);
    • technical assistance, counseling, or other services to support business planning;
    • rehabilitation of commercial properties, storefront improvements & façade improvements (disproportionately impacted small businesses only);
    • support for microbusinesses, including financial, childcare, and transportation costs (disproportionately impacted small businesses only); and
    • technical assistance, business incubators & grants for start-up or expansion costs for small businesses (disproportionately impacted small businesses only). [8]
  • Expenses to improve the efficacy of economic relief programs, such as:
    • data analysis;
    • targeted consumer outreach;
    • improvements to data or technology infrastructure; and
    • impact evaluations.
    • administrative costs for programs responding to the public health emergency and its economic impacts; and
    • addressing administrative needs caused or exacerbated by the pandemic.[9]

Treasury will recognize a household or population as impacted by the pandemic if it has experienced unemployment, increased food or housing insecurity, or has low to moderate income.[10] Treasury provides a general criteria to determine if a household falls into the category of low to moderate income based on Federal Poverty Guidelines (FPG) or Area Median Income (AMI).[11] A population is also considered as impacted if it otherwise qualifies for:

  • Children’s Health Insurance Program (CHIP);
  • Childcare Subsidies through the Child Care and Development Fund (CCDF) Program;
  • Medicaid;
  • National Housing Trust Fund (HTF) (affordable housing programs only); or
  • Home Investment Partnerships Program (HOME) (affordable housing programs only).[12]

Treasury will recognize a household as disproportionately impacted by the pandemic if they have low income, reside in a Qualified Census Tract, reside in the U.S. territories, or are receiving services from territorial or Tribal governments. Certain communities can also be designated as low income, if criteria are met.[13] The Final Rule also clarifies that Treasury will recognize a household as disproportionately impacted if it otherwise qualifies for certain federal benefits including:

  • Temporary Assistance for Needy Families (TANF);
  • Supplemental Nutrition Assistance Program (SNAP);
  • Free and Reduced-Price Lunch (NSLP) and/or School Breakfast (SBP) programs;
  • Medicare Part D Low-income Subsidies;
  • Supplemental Security Income (SSI);
  • Head Start and/or Early Head Start;
  • Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
  • Section 8 Vouchers;
  • Low-Income Home Energy Assistance Program (LIHEAP);
  • Pell Grants;
  • For services to address educational disparities, Treasury will recognize Title I eligible schools as disproportionately impacted and responsive services that support the school generally or support the whole school as eligible. [14]

Disproportionately impacted households may qualify for the enumerated uses listed in the Final Rule under both the ‘Impacted’ and ‘Disproportionately Impacted’ categories.[15]

The Final Rule has expanded several uses of CSLFRF funds to apply to all of those “impacted” by the pandemic. These include but are not limited to:

  • assistance applying for public benefits or services;
  • programs or services that address or mitigate the impacts of the COVID-19 public health emergency on childhood health or welfare, including:
    • childcare;
    • early learning services;  
    • programs to provide home visits; and
    • services for families involved in the child welfare system and foster youth;
  • programs to address the impacts of lost instructional time for students; and
  • programs or services that address housing insecurity, lack of affordable housing, or homelessness.[16]

Additionally, Treasury has enumerated uses that are solely eligible for communities that have been disproportionately impacted by the pandemic:

  • payment for community health workers to help households access health & social services;
  • remediation of lead paint or other lead hazards;
  • primary care clinics, hospitals, integration of health services into other settings, and other investments in medical equipment & facilities designed to address health disparities;
  • housing vouchers & assistance relocating to neighborhoods with higher economic opportunity;
  • investments in neighborhoods to promote improved health outcomes;
  • improvements to vacant and abandoned properties;
  • services to address educational disparities; and
  • schools and other educational equipment & facilities.[17]

Treasury’s CSLFRF Frequently Asked Questions (“FAQs”) provide further guidance to recipients of CSLFRF funding on eligible uses of funds to address negative economic impacts.[18] The FAQs currently reflect the Interim Final Rule, and Treasury is planning to update the FAQ at a later date.

Last Revised: January 31, 2022

[1] American Rescue Plan Act of 2021 § 9901, Pub. L. No. 117-2, amending 42 U.S.C. § 801 et seq., at 602(c)(1) , available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text#H961DF10AD21C4DD88C956CA51623439E.

[2] Department of Treasury, Overview of the Final Rule: “Coronavirus State & Local Fiscal Recovery Funds:  Overview of the Final Rule,” January 6, 2022, p. 14-15, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-Overview.pdf

[3] Treas. Reg. 31 CFR 35 at 15, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf

[4] Id., at 24-26.

[5] Id.

[6] Id.

[7] Department of Treasury, Overview of the Final Rule: “Coronavirus State & Local Fiscal Recovery Funds:  Overview of the Final Rule,” January 6, 2022, at 18, available at: 

https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-Overview.pdf

[8] Id., at 21-25

[9] Id., at 28-29.

[10] Treas. Reg. 31 CFR 35 at 37, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf..

[11] Id., at 30.

[12] Id., at 41.

[13] Department of Treasury, Overview of the Final Rule: “Coronavirus State & Local Fiscal Recovery Funds:  Overview of the Final Rule,” January 6, 2022, at 19, available at: 

https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-Overview.pdf.

[15] Id., at 38.

[16] Id., at 79.

[17] Id., at 125-138.

[18] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of January 2022) – FAQs #2.1 – 2.21, at 4-13, available at: https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf.