Prepared jointly be the Legislative Fiscal Office and the Department of Administrative Services Chief Financial Office - May 26, 2021
American Rescue Plan Act (ARPA) - Overview
The U.S. Treasury has provided its initial guidance regarding the use of American Rescue Plan Act (ARPA) funds. Generally, ARPA funds are available for costs incurred from March 3, 2021 through December 31, 2024; all funds must be spent by December 2026. Below is an overview of the guidance regarding eligible and ineligible uses of the funds coming directly to the states. It should be noted that there is a 60 day comment period and the guidance will likely change after that time.
Guidance Regarding Eligible Uses
Support the public health response to the pandemic - To be used for public health services and programs to contain and mitigate the spread of COVID-19, i.e. COVID-19 response & prevention including costs of public health and safety staff time spent specifically on COVID-19 related work. This also includes new behavioral healthcare if needs have been exacerbated by the pandemic, vaccination programs and sites, telemedicine, and data systems.
Addressing the negative economic impacts caused by the pandemic - To be used to assist households, unemployed workers (including job training), small businesses and non-profits, impacted industries; rehire public sector staff; and refill the UI Trust Fund. Funds under this category must be for people and businesses that can demonstrate issues/costs related to the pandemic. Funds can be used to implement economic relief programs with investments in technology infrastructure, data analysis, targeted outreach, and impact evaluations.
Serving the hardest hit communities and families - To be used to address health and/or educational disparities, invest in housing and neighborhoods, and promote healthy childhood environments. Eligible expenditures must be in, or to families living in, a Qualified Census Tract or to populations that have a demonstrated disproportionate impact from COVID-19. Investments under this category in educational disparities and healthy childhood environments must be for new or expanded services or programs.
Providing premium pay for essential workers - Funds may be used to provide premium pay for low- and moderate-income workers providing essential work during the Public Health Emergency. Premium pay for low income workers may be up to 150% of the greater of the state or county average annual wage.
Investing in water, sewer, and broadband infrastructure - Guidance provides definitions primarily focused on Clean Water and Drinking Water Revolving Funds and Broadband investments. Other general infrastructure is not covered under this specific category.
Revenue Replacement - Provides a specific calculation formula based on historical financial information and on General Revenue (not the same as budgeted General Fund). Under this category, funds can be used for a number of items including infrastructure not included in other sections of the guidance and costs related to police and public safety.
Guidance Regarding Ineligible Uses
The guidance identifies specific ineligible uses for the funds; the funds cannot be used for the following:
• Reduce taxes
• Pay for legal settlements or judgments
• Make a deposit into a pension or rainy day fund
• Pay for previously incurred debt
Original source can be found here.
