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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?

The U.S. Department of the Treasury’s (“Treasury”) May 10, 2021 Interim Final Rule (“The Rule”) provides guidance to municipalities on allowable uses of Coronavirus Local Fiscal Recovery Funds (“CLFRF”) and includes broad language and considerations for municipalities to use in assessing whether an expense responds to the negative economic impacts of the public health emergency. Generally, Treasury places the burden of assessing whether a program meets this requirement on municipalities. In considering whether a program or service responds to the negative economic impacts of the public health emergency, Treasury recommends 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.[1] It is important to note that a response to negative economic impacts that are not related to the COVID-19 public health emergency are not eligible.[2] Treasury further notes that programs and services must be related and reasonably proportional to the extent and type of harm experienced.[3]

While Treasury’s guidance does not explicitly address website upgrades related to transportation accessibility, the guidance 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 lists and other programs may be considered using Treasury’s evaluation criteria.[4] Examples provided include, but are not limited to:

  • Assistance to households in addressing:
    • food assistance;
    • rent, mortgage, or utility assistance;
    • internet access or digital literacy assistance; and
    • counseling and legal aid to prevent eviction or homelessness.[5]
  • 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.[6]
  • Services provided in or to families living in a Qualified Census Tract:
    • services to address homelessness such as supportive housing, and to improve access to stable, affordable housing among unhoused individuals; and
    • providing assistance to high-poverty school districts to advance equitable funding across districts and geographies.[7]

In a household or population which experienced unemployment, increased food or housing insecurity, or subsists at a low-to-moderate income level is presumed to have experienced the requisite economic harm as a result of the pandemic and could thus qualify as a disproportionately impacted community.[8]

Last Revised: June 10, 2021

[1] Treas. Reg. 35 CFR 31 at 30-31, available at https://home.treasury.gov/system/files/136/FRF-Interim-Final-Rule.pdf.

[2] Id.

[3] Id.

[4] Id. at 11.

[5] Id. at 33.

[6] Id. at 34.

[7] Id. at 38-41.

[8] Id. at 33.