American Rescue Plan Act (ARPA)
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law. Under the Act, $350 billion was provided for eligible state, local, territorial, and Tribal governments to respond to the COVID-19 public health emergency through the Coronavirus State Fiscal Recovery Fund (CSFRF) and the Coronavirus Local Fiscal Recovery Fund (CLFRF). The funds are designed to assist governments in responding to the pandemic, addressing its economic impact, and establishing a foundation for a strong and equitable recovery.
Expenditures must be obligated by December 31, 2024 and spent by December 31, 2026.
Eligible Uses of Funds
Recipients may use the funds in the following four categories:
- To respond to the COVID-19 public health emergency or its negative economic impacts;
- To respond to workers performing essential work during the COVID-19 pandemic by providing premium pay to eligible workers of the recipient, or by providing grants to eligible employers who have eligible workers who performed essential work;
- For the provision of government services to the extent of a reduction in revenue by the recipient due to the COVID-19 pandemic; and
- To make necessary investments in water, sewer, or broadband infrastructure.
Ineligible Uses of Funds
Recipients may not spend CLFRF in the following categories:
- To directly or indirectly offset a reduction in net tax revenue due to a change in law from March 3, 2021, through the last day of the fiscal year in which the funds provided have been spent;
- To make a deposit to a pension fund;
- To fund debt service costs, legal settlements, or judgements; and
- To make deposits into a rainy day fund or financial reserves.