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Coronavirus State and Local Fiscal Recovery Funds

2021 Interim Final Rule: Frequently Asked Questions

AS OF AUGUST 2023

This document contains answers to frequently asked questions regarding the Interim Final Rule 

of the Coronavirus State and Local Fiscal Recovery Funds (CSFRF / CLFRF, or Fiscal Recovery 

Funds). Treasury will be updating this document periodically in response to questions received 

from stakeholders. Recipients and stakeholders should consult the Interim Final Rule for 

additional information.

• For overall information about the program, including information on requesting funding, 

please see https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-localand-tribal-governments 

• For general questions about CSFRF / CLFRF, please email SLFRP@treasury.gov

Update (August 2023): The 2022 final rule went into effect on April 1, 2022, and

Treasury has released many supporting documents for recipients. Such documents 

include the Overview of the Final Rule, Final Rule FAQs, FAQ Supplement for NEUs, 

FAQs Issued by the IRS, and the Affordable Housing How-To Guide. The 2022 Final 

Rule FAQs include updated FAQs originally included in this document, as well as 

additional FAQs. Recipients are encouraged to consult these documents.

Furthermore, in August 2023, Treasury released an interim final rule that implements 

the new eligible uses added to the SLFRF program by the Consolidated 

Appropriations Act, 2023. Treasury anticipates issuing FAQs for the 2023 interim 

final rule at a later date. Recipients may find helpful the Overview of the 2023 Interim 

Final Rule. As noted below, the FAQs in this document pertain to the 2021 interim 

final rule. 

Update (January 2022): The FAQs in this document pertain to the Interim Final Rule 

(IFR), which is in effect until April 1, 2022. In addition to this document, recipients 

are encouraged to consult the Statement Regarding Compliance with the Coronavirus 

State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule, which 

provides guidance on use of funds until the Final Rule takes effect.

Treasury anticipates issuing FAQs for the Final Rule at a later date. Recipients may 

find helpful the Overview of the Final Rule, which provides a summary of major 

provision of the Final Rule for informational purposes.
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Questions added 5/27/21: 1.5, 1.6, 2.13, 2.14, 2.15, 3.9, 4.5, 4.6, 10.3, 10.4 (noted with “[5/27]”)

Questions added 6/8/21: 2.16, 3.10, 3.11, 3.12, 4.7, 6.7, 8.2, 9.4, 9.5, 10.5 (noted with “[6/8]”)

Questions added 6/17/21: 6.8, 6.9, 6.10, 6.11 (noted with “[6/17]”)

Questions added 6/23/21: 1.7, 2.17, 2.18, 2.19, 2.20, 3.1 (appendix), 3.13, 4.8, 6.12 (noted with 

“[6/23]”)

Question added 6/24/21: 2.21 (noted with “[6/24]”)

Questions added 7/14/21: 1.8, 3.14, 3.15, 4.9, 4.10, 4.11, 4.12, 6.13, 6.14, 6.15, 6.16, 6.17, 10.3

updated (noted with “[7/14]”)

Question added 11/15/21: 12.1; Questions updated 11/15/21: 9.2

Answers to frequently asked questions on distribution of funds to non-entitlement units of local 

government (NEUs) can be found in this FAQ supplement, which is regularly updated.

1. Eligibility and Allocations

1.1. Which governments are eligible for funds? 

The following governments are eligible:

• States and the District of Columbia

• Territories

• Tribal governments

• Counties

• Metropolitan cities 

• Non-entitlement units, or smaller local governments

1.2. Which governments receive funds directly from Treasury?

Treasury will distribute funds directly to each eligible state, territory, metropolitan city, 

county, or Tribal government. Smaller local governments that are classified as nonentitlement units will receive funds through their applicable state government. 

1.3. Are special-purpose units of government eligible to receive funds?

Special-purpose units of local government will not receive funding allocations; however, 

a state, territory, local, or Tribal government may transfer funds to a special-purpose unit 

of government. Special-purpose districts perform specific functions in the community, 

such as fire, water, sewer or mosquito abatement districts.
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1.4. How are funds being allocated to Tribal governments, and how will Tribal 

governments find out their allocation amounts?1

$20 billion of Fiscal Recovery Funds was reserved for Tribal governments. The 

American Rescue Plan Act specifies that $1 billion will be allocated evenly to all eligible 

Tribal governments. The remaining $19 billion will be distributed using an allocation 

methodology based on enrollment and employment. 

There will be two payments to Tribal governments. Each Tribal government’s first 

payment will include (i) an amount in respect of the $1 billion allocation that is to be 

divided equally among eligible Tribal governments and (ii) each Tribal government’s pro 

rata share of the Enrollment Allocation. Tribal governments will be notified of their 

allocation amount and delivery of payment 4-5 days after completing request for funds in 

the Treasury Submission Portal. The deadline to make the initial request for funds was 

June 21, 2021.

The second payment will include a Tribal government’s pro rata share of the 

Employment Allocation. There is a $1,000,000 minimum employment allocation for 

Tribal governments. In late-June, Tribal governments will receive an email notification 

to re-enter the Treasury Submission Portal to confirm or amend their 2019 employment 

numbers that were submitted to the Department of the Treasury for the CARES Act’s 

Coronavirus Relief Fund. To receive an Employment Allocation, including the minimum 

employment allocation, Tribal governments must confirm employment numbers by July 

23, 2021. Treasury will calculate employment allocations for those Tribal governments 

that confirmed or submitted amended employment numbers by the deadline. In August, 

Treasury will communicate to Tribal governments the amount of their portion of the 

Employment Allocation and the anticipated date for the second payment.

1.5. My county is a unit of general local government with population under 50,000. Will 

my county receive funds directly from Treasury? [5/27]

Yes. All counties that are units of general local government will receive funds directly 

from Treasury and should apply via the online portal. The list of county allocations is 

available here. 

1.6. My local government expected to be classified as a non-entitlement unit. Instead, it 

was classified as a metropolitan city. Why? [5/27]

The American Rescue Plan Act defines, for purposes of the Coronavirus Local Fiscal 

Recovery Fund (CLFRF), metropolitan cities to include those that are currently 

metropolitan cities under the Community Development Block Grant (CDBG) program 

but also those cities that relinquish or defer their status as a metropolitan city for purposes 

1 The answer to this question was updated on July 19, 2021. 
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of the CDBG program. This would include, by way of example, cities that are principal 

cities of their metropolitan statistical area, even if their population is less than 50,000. In 

other words, a city that is eligible to be a metropolitan city under the CDBG program is 

eligible as a metropolitan city under the CLFRF, regardless of how that city has elected to 

participate in the CDBG program.

Unofficial allocation estimates produced by other organizations may have classified 

certain local governments as non-entitlement units of local government. However, based 

on the statutory definitions, some of these local governments should have been classified

as metropolitan cities. 

1.7. In order to receive and use Fiscal Recovery Funds, must a recipient government 

maintain a declaration of emergency relating to COVID-19? [6/23]

No. Neither the statute establishing the CSFRF/CLFRF nor the Interim Final Rule 

requires recipients to maintain a local declaration of emergency relating to COVID-19. 

1.8. Can non-profit or private organizations receive funds? If so, how? [7/14]

Yes. Under section 602(c)(3) of the Social Security Act, a State, territory, or Tribal 

government may transfer funds to a “private nonprofit organization . . . , a Tribal 

organization . . . , a public benefit corporation involved in the transportation of 

passengers or cargo, or a special-purpose unit of State or local government.” Similarly, 

section 603(c)(3) authorizes a local government to transfer funds to the same entities 

(other than Tribal organizations). The Interim Final Rule clarifies that the lists of 

transferees in sections 602(c)(3) and 603(c)(3) are not exclusive, and recipients may 

transfer funds to constituent units of government or private entities beyond those 

specified in the statute. A transferee receiving a transfer from a recipient under sections 

602(c)(3) and 603(c)(3) will be considered to be a subrecipient and will be expected to 

comply with all subrecipient reporting requirements. 

The ARPA does not authorize Treasury to provide CSFRF/CLFRF funds directly to nonprofit or private organizations. Thus, non-profit or private organizations should seek 

funds from CSFRF/CLFRF recipient(s) in their jurisdiction (e.g., a State, local, territorial, 

or Tribal government). 

2. Eligible Uses – Responding to the Public Health Emergency / Negative 

Economic Impacts

2.1. What types of COVID-19 response, mitigation, and prevention activities are 

eligible?

A broad range of services are needed to contain COVID-19 and are eligible uses, 

including vaccination programs; medical care; testing; contact tracing; support for 

isolation or quarantine; supports for vulnerable populations to access medical or public 

health services; public health surveillance (e.g., monitoring case trends, genomic 
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sequencing for variants); enforcement of public health orders; public communication 

efforts; enhancement to health care capacity, including through alternative care facilities; 

purchases of personal protective equipment; support for prevention, mitigation, or other 

services in congregate living facilities (e.g., nursing homes, incarceration settings, 

homeless shelters, group living facilities) and other key settings like schools; ventilation 

improvements in congregate settings, health care settings, or other key locations; 

enhancement of public health data systems; and other public health responses. Capital 

investments in public facilities to meet pandemic operational needs are also eligible, such 

as physical plant improvements to public hospitals and health clinics or adaptations to 

public buildings to implement COVID-19 mitigation tactics. 

2.2. If a use of funds was allowable under the Coronavirus Relief Fund (CRF) to 

respond to the public health emergency, may recipients presume it is also allowable

under CSFRF/CLFRF? 

Generally, funding uses eligible under CRF as a response to the direct public health 

impacts of COVID-19 will continue to be eligible under CSFRF/CLFRF, with the 

following two exceptions: (1) the standard for eligibility of public health and safety 

payrolls has been updated; and (2) expenses related to the issuance of tax-anticipation 

notes are not an eligible funding use. 

2.3. If a use of funds is not explicitly permitted in the Interim Final Rule as a response to 

the public health emergency and its negative economic impacts, does that mean it is 

prohibited? 

The Interim Final Rule contains a non-exclusive list of programs or services that may be 

funded as responding to COVID-19 or the negative economic impacts of the COVID-19 

public health emergency, along with considerations for evaluating other potential uses of 

Fiscal Recovery Funds not explicitly listed. The Interim Final Rule also provides 

flexibility for recipients to use Fiscal Recovery Funds for programs or services that are 

not identified on these non-exclusive lists but which meet the objectives of section 

602(c)(1)(A) or 603(c)(1)(A) by responding to the COVID-19 public health emergency 

with respect to COVID-19 or its negative economic impacts. 

2.4. May recipients use funds to respond to the public health emergency and its negative 

economic impacts by replenishing state unemployment funds? 

Consistent with the approach taken in the CRF, recipients may make deposits into the 

state account of the Unemployment Trust Fund up to the level needed to restore the prepandemic balances of such account as of January 27, 2020, or to pay back advances 

received for the payment of benefits between January 27, 2020 and the date when the 

Interim Final Rule is published in the Federal Register. 

2.5. What types of services are eligible as responses to the negative economic impacts of 

the pandemic?
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Eligible uses in this category include assistance to households; small businesses and nonprofits; and aid to impacted industries.

Assistance to households includes, but is not limited to: food assistance; rent, mortgage, 

or utility assistance; counseling and legal aid to prevent eviction or homelessness; cash 

assistance; emergency assistance for burials, home repairs, weatherization, or other 

needs; internet access or digital literacy assistance; or job training to address negative 

economic or public health impacts experienced due to a worker’s occupation or level of 

training. 

Assistance to small business and non-profits includes, but is not limited to: 

• loans or grants to mitigate financial hardship such as declines in revenues or 

impacts of periods of business closure, for example by supporting payroll and 

benefits costs, costs to retain employees, mortgage, rent, or utilities costs, and 

other operating costs;

• Loans, grants, or in-kind assistance to implement COVID-19 prevention or 

mitigation tactics, such as physical plant changes to enable social distancing, 

enhanced cleaning efforts, barriers or partitions, or COVID-19 vaccination, 

testing, or contact tracing programs; and

• Technical assistance, counseling, or other services to assist with business planning 

needs

2.6. May recipients use funds to respond to the public health emergency and its negative 

economic impacts by providing direct cash transfers to households? 

Yes, provided the recipient considers whether, and the extent to which, the household has 

experienced a negative economic impact from the pandemic. Additionally, cash transfers 

must be reasonably proportional to the negative economic impact they are intended to 

address. Cash transfers grossly in excess of the amount needed to address the negative 

economic impact identified by the recipient would not be considered to be a response to 

the COVID-19 public health emergency or its negative impacts. In particular, when 

considering appropriate size of permissible cash transfers made in response to the 

COVID-19 public health emergency, state, local, territorial, and Tribal governments may 

consider and take guidance from the per person amounts previously provided by the 

federal government in response to the COVID crisis. 

2.7. May funds be used to reimburse recipients for costs incurred by state and local 

governments in responding to the public health emergency and its negative 

economic impacts prior to passage of the American Rescue Plan? 

Use of Fiscal Recovery Funds is generally forward looking. The Interim Final Rule 

permits funds to be used to cover costs incurred beginning on March 3, 2021. 

2.8. May recipients use funds for general economic development or workforce 

development?
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Generally, not. Recipients must demonstrate that funding uses directly address a negative 

economic impact of the COVID-19 public health emergency, including funds used for 

economic or workforce development. For example, job training for unemployed workers 

may be used to address negative economic impacts of the public health emergency and be 

eligible.

2.9. How can recipients use funds to assist the travel, tourism, and hospitality 

industries? 

Aid provided to tourism, travel, and hospitality industries should respond to the negative 

economic impacts of the pandemic. For example, a recipient may provide aid to support 

safe reopening of businesses in the tourism, travel and hospitality industries and to 

districts that were closed during the COVID-19 public health emergency, as well as aid a 

planned expansion or upgrade of tourism, travel and hospitality facilities delayed due to 

the pandemic. 

Tribal development districts are considered the commercial centers for tribal hospitality, 

gaming, tourism and entertainment industries. 

2.10. May recipients use funds to assist impacted industries other than travel, tourism, 

and hospitality? 

Yes, provided that recipients consider the extent of the impact in such industries as 

compared to tourism, travel, and hospitality, the industries enumerated in the statute. For 

example, nationwide the leisure and hospitality industry has experienced an 

approximately 17 percent decline in employment and 24 percent decline in revenue, on 

net, due to the COVID-19 public health emergency. Recipients should also consider 

whether impacts were due to the COVID-19 pandemic, as opposed to longer-term 

economic or industrial trends unrelated to the pandemic. 

Recipients should maintain records to support their assessment of how businesses or 

business districts receiving assistance were affected by the negative economic impacts of 

the pandemic and how the aid provided responds to these impacts.

2.11. How does the Interim Final Rule help address the disparate impact of COVID-19 on 

certain populations and geographies? 

In recognition of the disproportionate impacts of the COVID-19 virus on health and 

economic outcomes in low-income and Native American communities, the Interim Final 

Rule identifies a broader range of services and programs that are considered to be in 

response to the public health emergency when provided in these communities. 

Specifically, Treasury will presume that certain types of services are eligible uses when 

provided in a Qualified Census Tract (QCT), to families living in QCTs, or when these 

services are provided by Tribal governments. 
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Recipients may also provide these services to other populations, households, or 

geographic areas disproportionately impacted by the pandemic. In identifying these 

disproportionately-impacted communities, recipients should be able to support their 

determination for how the pandemic disproportionately impacted the populations, 

households, or geographic areas to be served.

Eligible services include:

• Addressing health disparities and the social determinants of health, including: 

community health workers, public benefits navigators, remediation of lead paint 

or other lead hazards, and community violence intervention programs;

• Building stronger neighborhoods and communities, including: supportive housing 

and other services for individuals experiencing homelessness, development of 

affordable housing, and housing vouchers and assistance relocating to 

neighborhoods with higher levels of economic opportunity;

• Addressing educational disparities exacerbated by COVID-19, including: early 

learning services, increasing resources for high-poverty school districts, 

educational services like tutoring or afterschool programs, and supports for 

students’ social, emotional, and mental health needs; and

• Promoting healthy childhood environments, including: child care, home visiting 

programs for families with young children, and enhanced services for child 

welfare-involved families and foster youth.

2.12. May recipients use funds to pay for vaccine incentive programs (e.g., cash or in-kind

transfers, lottery programs, or other incentives for individuals who get vaccinated)?

Yes. Under the Interim Final Rule, recipients may use Coronavirus State and Local 

Fiscal Recovery Funds to respond to the COVID-19 public health emergency, including 

expenses related to COVID-19 vaccination programs. See 31 CFR 35.6(b)(1)(i). 

Programs that provide incentives reasonably expected to increase the number of people 

who choose to get vaccinated, or that motivate people to get vaccinated sooner than they 

otherwise would have, are an allowable use of funds so long as such costs are reasonably 

proportional to the expected public health benefit.

2.13. May recipients use funds to pay “back to work incentives” (e.g., cash payments for 

newly employed workers after a certain period of time on the job)? [5/27]

Yes. Under the Interim Final Rule, recipients may use Coronavirus State and Local 

Fiscal Recovery Funds to provide assistance to unemployed workers. See 31 CFR 

35.6(b)(4). This assistance can include job training or other efforts to accelerate rehiring 

and thus reduce unemployment, such as childcare assistance, assistance with 

transportation to and from a jobsite or interview, and incentives for newly employed 

workers.
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2.14. The Coronavirus Relief Fund (CRF) included as an eligible use: "Payroll expenses 

for public safety, public health, health care, human services, and similar employees 

whose services are substantially dedicated to mitigating or responding to the 

COVID-19 public health emergency." What has changed in CSFRF/CLFRF, and 

what type of documentation is required under CSFRF/CLFRF? [5/27]

Many of the expenses authorized under the Coronavirus Relief Fund are also eligible uses 

under the CSFRF/CLFRF. However, in the case of payroll expenses for public safety, 

public health, health care, human services, and similar employees (hereafter, public 

health and safety staff), the CSFRF/CLFRF does differ from the CRF. This change 

reflects the differences between the ARPA and CARES Act and recognizes that the 

response to the COVID-19 public health emergency has changed and will continue to 

change over time. In particular, funds may be used for payroll and covered benefits 

expenses for public safety, public health, health care, human services, and similar 

employees, including first responders, to the extent that the employee’s time that is 

dedicated to responding to the COVID-19 public health emergency.

For administrative convenience, the recipient may consider a public health and safety 

employee to be entirely devoted to mitigating or responding to the COVID-19 public 

health emergency, and therefore fully covered, if the employee, or his or her operating 

unit or division, is primarily dedicated (e.g., more than half of the employee’s time is 

dedicated) to responding to the COVID-19 public health emergency. 

Recipients may use presumptions for assessing whether an employee, division, or 

operating unit is primarily dedicated to COVID-19 response. The recipient should 

maintain records to support its assessment, such as payroll records, attestations from 

supervisors or staff, or regular work product or correspondence demonstrating work on 

the COVID-19 response. Recipients need not routinely track staff hours. Recipients 

should periodically reassess their determinations. 

2.15. What staff are included in “public safety, public health, health care, human 

services, and similar employees”? Would this include, for example, 911 operators, 

morgue staff, medical examiner staff, or EMS staff? [5/27]

As discussed in the Interim Final Rule, funds may be used for payroll and covered 

benefits expenses for public safety, public health, health care, human services, and 

similar employees, for the portion of the employee’s time that is dedicated to responding 

to the COVID-19 public health emergency. 

Public safety employees would include police officers (including state police officers), 

sheriffs and deputy sheriffs, firefighters, emergency medical responders, correctional and 

detention officers, and those who directly support such employees such as dispatchers 

and supervisory personnel. Public health employees would include employees involved 

in providing medical and other health services to patients and supervisory personnel, 

including medical staff assigned to schools, prisons, and other such institutions, and other 
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support services essential for patient care (e.g., laboratory technicians, medical examiner 

or morgue staff) as well as employees of public health departments directly engaged in 

matters related to public health and related supervisory personnel. Human services staff 

include employees providing or administering social services; public benefits; child 

welfare services; and child, elder, or family care, as well as others.

2.16. May recipients use funds to establish a public jobs program? [6/8]

Yes. The Interim Final Rule permits a broad range of services to unemployed or 

underemployed workers and other individuals that suffered negative economic impacts 

from the pandemic. That can include public jobs programs, subsidized employment, 

combined education and on-the-job training programs, or job training to accelerate 

rehiring or address negative economic or public health impacts experienced due to a 

worker’s occupation or level of training. The broad range of permitted services can also 

include other employment supports, such as childcare assistance or assistance with 

transportation to and from a jobsite or interview.

The Interim Final Rule includes as an eligible use re-hiring public sector staff up to the 

government’s level of pre-pandemic employment. “Public sector staff” would not 

include individuals participating in a job training or subsidized employment program 

administered by the recipient. 

2.17. The Interim Final Rule states that “assistance or aid to individuals or businesses 

that did not experience a negative economic impact from the public health 

emergency would not be an eligible use under this category.” Are recipients 

required to demonstrate that each individual or business experienced a negative 

economic impact for that individual or business to receive assistance? [6/23]

Not necessarily. The Interim Final Rule allows recipients to demonstrate a negative 

economic impact on a population or group and to provide assistance to households or 

businesses that fall within that population or group. In such cases, the recipient need only 

demonstrate that the household or business is within the population or group that 

experienced a negative economic impact. 

For assistance to households, the Interim Final Rule states, “In assessing whether a 

household or population experienced economic harm as a result of the pandemic, a 

recipient may presume that a household or population that experienced unemployment or 

increased food or housing insecurity or is low- or moderate-income experienced negative 

economic impacts resulting from the pandemic.” This would allow, for example, an 

internet access assistance program for all low- or moderate-income households, but 

would not require the recipient to demonstrate or document that each individual low- or -

moderate income household experienced a negative economic impact from the COVID19 public health emergency apart from being low- or -moderate income. 

For assistance to small businesses, the Interim Final Rule states that assistance may be 

provided to small businesses, including loans, grants, in-kind assistance, technical 
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assistance or other services, to respond to the negative economic impacts of the COVID19 public health emergency. In providing assistance to small businesses, recipients must 

design a program that responds to the negative economic impacts of the COVID-19 

public health emergency, including by identifying how the program addresses the 

identified need or impact faced by small businesses. This can include assistance to adopt 

safer operating procedures, weather periods of closure, or mitigate financial hardship 

resulting from the COVID-19 public health emergency. 

As part of program design and to ensure that the program responds to the identified need, 

recipients may consider additional criteria to target assistance to businesses in need, 

including to small businesses. Assistance may be targeted to businesses facing financial 

insecurity, with substantial declines in gross receipts (e.g., comparable to measures used 

to assess eligibility for the Paycheck Protection Program), or facing other economic harm 

due to the pandemic, as well as businesses with less capacity to weather financial 

hardship, such as the smallest businesses, those with less access to credit, or those serving 

disadvantaged communities. For example, a recipient could find based on local data or 

research that the smallest businesses faced sharply increased risk of bankruptcy and 

develop a program to respond; such a program would only need to document a population 

or group-level negative economic impact, and eligibility criteria to limit access to the 

program to that population or group (in this case, the smallest businesses).

In addition, recognizing the disproportionate impact of the pandemic on disadvantaged 

communities, the Interim Final Rule also identifies a set of services that are 

presumptively eligible when provided in a Qualified Census Tract (QCT); to families and 

individuals living in QCTs; to other populations, households, or geographic areas 

identified by the recipient as disproportionately impacted by the pandemic; or when these 

services are provided by Tribal governments. For more information on the set of 

presumptively eligible services, see the Interim Final Rule section on Building Stronger 

Communities through Investments in Housing and Neighborhoods and FAQ 2.11.

2.18. Would investments in improving outdoor spaces (e.g. parks) be an eligible use of 

funds as a response to the public health emergency and/or its negative economic 

impacts? [6/23]

There are multiple ways that investments in improving outdoor spaces could qualify as 

eligible uses; several are highlighted below, though there may be other ways that a 

specific investment in outdoor spaces would meet eligible use criteria. 

First, in recognition of the disproportionate negative economic impacts on certain 

communities and populations, the Interim Final Rule identifies certain types of services 

that are eligible uses when provided in a Qualified Census Tract (QCT), to families and 

individuals living in QCTs, or when these services are provided by Tribal governments. 

Recipients may also provide these services to other populations, households, or 

geographic areas disproportionately impacted by the pandemic. 
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These programs and services include services designed to build stronger neighborhoods 

and communities and to address health disparities and the social determinants of health. 

The Interim Final Rule provides a non-exhaustive list of eligible services to respond to 

the needs of communities disproportionately impacted by the pandemic, and recipients 

may identify other uses of funds that do so, consistent with the Rule’s framework. For 

example, investments in parks, public plazas, and other public outdoor recreation spaces 

may be responsive to the needs of disproportionately impacted communities by 

promoting healthier living environments and outdoor recreation and socialization to 

mitigate the spread of COVID-19.

Second, recipients may provide assistance to small businesses in all communities. 

Assistance to small businesses could include support to enhance outdoor spaces for 

COVID-19 mitigation (e.g., restaurant patios) or to improve the built environment of the 

neighborhood (e.g., façade improvements).

Third, many governments saw significantly increased use of parks during the pandemic 

that resulted in damage or increased maintenance needs. The Interim Final Rule 

recognizes that “decrease[s to] a state or local government’s ability to effectively 

administer services” can constitute a negative economic impact of the pandemic.

2.19. Would expenses to address a COVID-related backlog in court cases be an eligible 

use of funds as a response to the public health emergency? [6/23]

The Interim Final Rule recognizes that “decrease[s to] a state or local government’s 

ability to effectively administer services,” such as cuts to public sector staffing levels, can 

constitute a negative economic impact of the pandemic. During the COVID-19 public 

health emergency, many courts were unable to operate safely during the pandemic and, as 

a result, now face significant backlogs. Court backlogs resulting from inability of courts 

to safely operate during the COVID-19 pandemic decreased the government’s ability to 

administer services. Therefore, steps to reduce these backlogs, such as implementing 

COVID-19 safety measures to facilitate court operations, hiring additional court staff or 

attorneys to increase speed of case resolution, and other expenses to expedite case 

resolution are eligible uses.

2.20. Can funds be used to assist small business startups as a response to the negative 

economic impact of COVID-19? [6/23]

As discussed in the Interim Final Rule, recipients may provide assistance to small 

businesses that responds to the negative economic impacts of COVID-19. The Interim 

Final Rule provides a non-exclusive list of potential assistance mechanisms, as well as 

considerations for ensuring that such assistance is responsive to the negative economic

impacts of COVID-19.

Treasury acknowledges a range of potential circumstances in which assisting small 

business startups could be responsive to the negative economic impacts of COVID-19, 
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including for small businesses and individuals seeking to start small businesses after the 

start of the COVID-19 public health emergency. For example: 

• A recipient could assist small business startups with additional costs associated 

with COVID-19 mitigation tactics (e.g., barriers or partitions; enhanced cleaning; 

or physical plant changes to enable greater use of outdoor space).

• A recipient could identify and respond to a negative economic impact of COVID19 on new small business startups; for example, if it could be shown that small 

business startups in a locality were facing greater difficult accessing credit than 

prior to the pandemic, faced increased costs to starting the business due to the 

pandemic, or that the small business had lost expected startup capital due to the 

pandemic.

• The Interim Final Rule also discusses eligible uses that provide support for 

individuals who have experienced a negative economic impact from the COVID19 public health emergency, including uses that provide job training for 

unemployed individuals. These initiatives also may support small business 

startups and individuals seeking to start small businesses. 

2.21. Can funds be used for eviction prevention efforts or housing stability services?

[6/24]

Yes. Responses to the negative economic impacts of the pandemic include “rent, 

mortgage, or utility assistance [and] counseling and legal aid to prevent eviction or 

homelessness.” This includes housing stability services that enable eligible households to 

maintain or obtain housing, such as housing counseling, fair housing counseling, case 

management related to housing stability, outreach to households at risk of eviction or 

promotion of housing support programs, housing related services for survivors of 

domestic abuse or human trafficking, and specialized services for individuals with 

disabilities or seniors that supports their ability to access or maintain housing.

This also includes legal aid such as legal services or attorney’s fees related to eviction 

proceedings and maintaining housing stability, court-based eviction prevention or 

eviction diversion programs, and other legal services that help households maintain or 

obtain housing.

Recipients may transfer funds to, or execute grants or contracts with, court systems, nonprofits, and a wide range of other organizations to implement these strategies.

3. Eligible Uses – Revenue Loss

3.1. How is revenue defined for the purpose of this provision? [appendix added 6/23]

The Interim Final Rule adopts a definition of “General Revenue” that is based on, but not 

identical, to the Census Bureau’s concept of “General Revenue from Own Sources” in the 

Annual Survey of State and Local Government Finances.
AS OF JULY 2023

14

General Revenue includes revenue from taxes, current charges, and miscellaneous 

general revenue. It excludes refunds and other correcting transactions, proceeds from 

issuance of debt or the sale of investments, agency or private trust transactions, and 

revenue generated by utilities and insurance trusts. General revenue also includes 

intergovernmental transfers between state and local governments, but excludes 

intergovernmental transfers from the Federal government, including Federal transfers 

made via a state to a locality pursuant to the CRF or the Fiscal Recovery Funds. 

Tribal governments may include all revenue from Tribal enterprises and gaming 

operations in the definition of General Revenue.

Please see the appendix for a diagram of the Interim Final Rule’s definition of General 

Revenue within the Census Bureau’s revenue classification structure. 

3.2. Will revenue be calculated on an entity-wide basis or on a source-by-source basis

(e.g. property tax, income tax, sales tax, etc.)? 

Recipients should calculate revenue on an entity-wide basis. This approach minimizes 

the administrative burden for recipients, provides for greater consistency across 

recipients, and presents a more accurate representation of the net impact of the 

COVID- 19 public health emergency on a recipient’s revenue, rather than relying on 

financial reporting prepared by each recipient, which vary in methodology used and 

which generally aggregates revenue by purpose rather than by source. 

3.3. Does the definition of revenue include outside concessions that contract with a state 

or local government? 

Recipients should classify revenue sources as they would if responding to the U.S. 

Census Bureau’s Annual Survey of State and Local Government Finances. According to 

the Census Bureau’s Government Finance and Employment Classification manual, the 

following is an example of current charges that would be included in a state or local 

government’s general revenue from own sources: “Gross revenue of facilities operated by 

a government (swimming pools, recreational marinas and piers, golf courses, skating 

rinks, museums, zoos, etc.); auxiliary facilities in public recreation areas (camping areas, 

refreshment stands, gift shops, etc.); lease or use fees from stadiums, auditoriums, and 

community and convention centers; and rentals from concessions at such facilities.”

3.4. What is the time period for estimating revenue loss? Will revenue losses experienced 

prior to the passage of the Act be considered? 

Recipients are permitted to calculate the extent of reduction in revenue as of four points 

in time: December 31, 2020; December 31, 2021; December 31, 2022; and December 31, 

2023. This approach recognizes that some recipients may experience lagged effects of the 

pandemic on revenues. 
AS OF JULY 2023

15

Upon receiving Fiscal Recovery Fund payments, recipients may immediately calculate 

revenue loss for the period ending December 31, 2020. 

3.5. What is the formula for calculating the reduction in revenue?

A reduction in a recipient’s General Revenue equals: 

Max {[Base Year Revenue* (1+Growth Adjustment)

(

nt

12)

] - Actual General Revenuet

; 0}

Where: 

Base Year Revenue is General Revenue collected in the most recent full fiscal year prior 

to the COVD-19 public health emergency.

Growth Adjustment is equal to the greater of 4.1 percent (or 0.041) and the recipient’s 

average annual revenue growth over the three full fiscal years prior to the COVID-19 

public health emergency. 

n equals the number of months elapsed from the end of the base year to the calculation 

date. 

Actual General Revenue is a recipient’s actual general revenue collected during 12-month 

period ending on each calculation date. 

Subscript t denotes the calculation date. 

3.6. Are recipients expected to demonstrate that reduction in revenue is due to the 

COVID-19 public health emergency? 

In the Interim Final Rule, any diminution in actual revenue calculated using the formula 

above would be presumed to have been “due to” the COVID-19 public health emergency. 

This presumption is made for administrative ease and in recognition of the broad-based 

economic damage that the pandemic has wrought.

3.7. May recipients use pre-pandemic projections as a basis to estimate the reduction in 

revenue? 

No. Treasury is disallowing the use of projections to ensure consistency and 

comparability across recipients and to streamline verification. However, in estimating 

the revenue shortfall using the formula above, recipients may incorporate their average 

annual revenue growth rate in the three full fiscal years prior to the public health 

emergency. 

3.8. Once a recipient has identified a reduction in revenue, are there any restrictions on 

how recipients use funds up to the amount of the reduction? 
AS OF JULY 2023

16

The Interim Final Rule gives recipients broad latitude to use funds for the provision of 

government services to the extent of reduction in revenue. Government services can 

include, but are not limited to, maintenance of infrastructure or pay-go spending for 

building new infrastructure, including roads; modernization of cybersecurity, including 

hardware, software, and protection of critical infrastructure; health services; 

environmental remediation; school or educational services; and the provision of police, 

fire, and other public safety services. 

However, paying interest or principal on outstanding debt, replenishing rainy day or other 

reserve funds, or paying settlements or judgments would not be considered provision of a 

government service, since these uses of funds do not entail direct provision of services to 

citizens. This restriction on paying interest or principal on any outstanding debt 

instrument, includes, for example, short-term revenue or tax anticipation notes, or paying 

fees or issuance costs associated with the issuance of new debt. In addition, the 

overarching restrictions on all program funds (e.g., restriction on pension deposits, 

restriction on using funds for non-federal match where barred by regulation or statute) 

would apply. 

3.9. How do I know if a certain type of revenue should be counted for the purpose of 

computing revenue loss? [5/27]

As discussed in FAQ #3.1, the Interim Final Rule adopts a definition of “General 

Revenue” that is based on, but not identical, to the Census Bureau’s concept of “General 

Revenue from Own Sources” in the Annual Survey of State and Local Government 

Finances.

Recipients should refer to the definition of “General Revenue” included in the Interim 

Final Rule. See 31 CFR 35.3. If a recipient is unsure whether a particular revenue source 

is included in the Interim Final Rule’s definition of “General Revenue,” the recipient may 

consider the classification and instructions used to complete the Census Bureau’s Annual 

Survey. 

For example, parking fees would be classified as a Current Charge for the purpose of the 

Census Bureau’s Annual Survey, and the Interim Final Rule’s concept of “General 

Revenue” includes all Current Charges. Therefore, parking fees would be included in the 

Interim Final Rule’s concept of “General Revenue.” 

The Census Bureau’s Government Finance and Employment Classification manual is 

available here. 

3.10. In calculating revenue loss, are recipients required to use audited financials? [6/8]

Where audited data is not available, recipients are not required to obtain audited data. 

Treasury expects all information submitted to be complete and accurate. See 31 CFR 

35.4(c).
AS OF JULY 2023

17

3.11. In calculating revenue loss, should recipients use their own data, or Census data? 

[6/8]

Recipients should use their own data sources to calculate general revenue, and do not 

need to rely on published revenue data from the Census Bureau. Treasury acknowledges 

that due to differences in timing, data sources, and definitions, recipients’ self-reported 

general revenue figures may differ somewhat from those published by the Census 

Bureau. 

3.12. Should recipients calculate revenue loss on a cash basis or an accrual basis? [6/8]

Recipients may provide data on a cash, accrual, or modified accrual basis, provided that

recipients are consistent in their choice of methodology throughout the covered period 

and until reporting is no longer required.

3.13. In identifying intergovernmental revenue for the purpose of calculating General 

Revenue, should recipients exclude all federal funding, or just federal funding 

related to the COVID-19 response? How should local governments treat federal 

funds that are passed through states or other entities, or federal funds that are 

intermingled with other funds? [6/23]

In calculating General Revenue, recipients should exclude all intergovernmental transfers 

from the federal government. This includes, but is not limited to, federal transfers made 

via a state to a locality pursuant to the Coronavirus Relief Fund or Fiscal Recovery 

Funds. To the extent federal funds are passed through states or other entities or 

intermingled with other funds, recipients should attempt to identify and exclude the 

federal portion of those funds from the calculation of General Revenue on a best-efforts 

basis. 

3.14. What entities constitute a government for the purpose of calculating revenue loss?

[7/14]

In determining whether a particular entity is part of a recipient’s government for purposes 

of measuring a recipient’s government revenue, recipients should identify all the entities 

included in their government and the general revenue attributable to these entities on a 

best-efforts basis. Recipients are encouraged to consider how their administrative 

structure is organized under state and local statutes. In cases in which the autonomy of 

certain authorities, commissions, boards, districts, or other entities is not readily 

distinguishable from the recipient’s government, recipients may adopt the Census 

Bureau’s criteria for judging whether an entity is independent from, or a constituent of, a 

given government. For an entity to be independent, it generally meets all four of the 

following conditions:

• The entity is an organized entity and possesses corporate powers, such as 

perpetual succession, the right to sue and be sued, having a name, the ability to 

make contracts, and the ability to acquire and dispose of property.
AS OF JULY 2023

18

• The entity has governmental character, meaning that it provides public services, 

or wields authority through a popularly elected governing body or officers 

appointed by public officials. A high degree of responsibility to the public, 

demonstrated by public reporting requirements or by accessibility of records for 

public inspection, also evidences governmental character.

• The entity has substantial fiscal independence, meaning it can determine its 

budget without review and modification by other governments. For instance, the 

entity can determine its own taxes, charges, and debt issuance without another 

government’s supervision.

• The entity has substantial administrative independence, meaning it has a 

popularly elected governing body, or has a governing body representing two or 

more governments, or, in the event its governing body is appointed by another 

government, the entity performs functions that are essentially different from those 

of, and are not subject to specification by, its creating government.

If an entity does not meet all four of these conditions, a recipient may classify the entity 

as part of the recipient’s government and assign the portion of General Revenue that 

corresponds to the entity. 

To further assist recipients in applying the forgoing criteria, recipients may refer to the 

Census Bureau’s Individual State Descriptions: 2017 Census of Governments

publication, which lists specific entities and classes of entities classified as either 

independent (defined by Census as “special purpose governments”) or constituent 

(defined by Census as “dependent agencies”) on a state-by-state basis. Recipients should 

note that the Census Bureau’s lists are not exhaustive and that Census classifications are 

based on an analysis of state and local statutes as of 2017 and subject to the Census 

Bureau’s judgement. Though not included in the Census Bureau’s publication, state 

colleges and universities are generally classified as dependent agencies of state 

governments by the Census Bureau. 

If an entity is determined to be part of the recipient’s government, the recipient must also 

determine whether the entity’s revenue is covered by the Interim Final Rule’s definition 

of “general revenue.” For example, some cash flows may be outside the definition of 

“general revenue.” In addition, note that the definition of general revenue includes Tribal 

enterprises in the case of Tribal governments. Refer to FAQ 3.1 (and the Appendix) for 

the components included in General Revenue.

3.15. The Interim Final Rule’s definition of General Revenue excludes revenue generated 

by utilities. Can you please clarify the definition of utility revenue? [7/14]

As noted in FAQs 3.1 and 3.9, the Interim Final Rule adopts a definition of “general 

revenue” that is based on, but not identical to, the Census Bureau’s concept of “General 

Revenue from Own Sources” in the Annual Survey of State and Local Government 

Finances. Recipients should refer to the definition of “general revenue” included in the 

Interim Final Rule. See 31 CFR 35.3. If a recipient is unsure whether a particular 

revenue source is included in the Interim Final Rule’s definition of “general revenue,” the 
AS OF JULY 2023

19

recipient may consider the classification and instructions used to complete the Census 

Bureau’s Annual Survey.

According to the Census Bureau’s Government Finance and Employment Classification 

manual, utility revenue is defined as “[g]ross receipts from sale of utility commodities or 

services to the public or other governments by publicly-owned and controlled utilities.” 

This includes revenue from operations of publicly-owned and controlled water supply 

systems, electric power systems, gas supply systems, and public mass transit systems (see 

pages 4-45 and 4-46 of the manual for more detail). 

Except for these four types of utilities, revenues from all commercial-type activities of a 

recipient’s government (e.g., airports, educational institutions, lotteries, public hospitals, 

public housing, parking facilities, port facilities, sewer or solid waste systems, and toll 

roads and bridges) are covered by the Interim Final Rule’s definition of “general 

revenue.” If a recipient is unsure whether a particular entity performing one of these 

commercial-type activities can be considered part of the recipient’s government, please 

see FAQ 3.14.

4. Eligible Uses – General 

4.1. May recipients use funds to replenish a budget stabilization fund, rainy day fund, or 

similar reserve account? 

No. Funds made available to respond to the public health emergency and its negative 

economic impacts are intended to help meet pandemic response needs and provide 

immediate stabilization for households and businesses. Contributions to rainy day funds 

and similar reserves funds would not address these needs or respond to the COVID-19 

public health emergency, but would rather be savings for future spending needs. 

Similarly, funds made available for the provision of governmental services (to the extent 

of reduction in revenue) are intended to support direct provision of services to citizens. 

Contributions to rainy day funds are not considered provision of government services, 

since such expenses do not directly relate to the provision of government services.

4.2. May recipients use funds to invest in infrastructure other than water, sewer, and 

broadband projects (e.g. roads, public facilities)?

Under 602(c)(1)(C) or 603(c)(1)(C), recipients may use funds for maintenance of 

infrastructure or pay-go spending for building of new infrastructure as part of the general 

provision of government services, to the extent of the estimated reduction in revenue due 

to the public health emergency. 

Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not 

be considered a response to the public health emergency and its negative economic 

impacts unless the project responds to a specific pandemic-related public health need 

(e.g., investments in facilities for the delivery of vaccines) or a specific negative 

economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract). 
AS OF JULY 2023

20

4.3. May recipients use funds to pay interest or principal on outstanding debt?

No. Expenses related to financing, including servicing or redeeming notes, would not 

address the needs of pandemic response or its negative economic impacts. Such expenses 

would also not be considered provision of government services, as these financing 

expenses do not directly provide services or aid to citizens. 

This applies to paying interest or principal on any outstanding debt instrument, including, 

for example, short-term revenue or tax anticipation notes, or paying fees or issuance costs 

associated with the issuance of new debt.

4.4. May recipients use funds to satisfy nonfederal matching requirements under the 

Stafford Act? May recipients use funds to satisfy nonfederal matching requirements 

generally? 

Fiscal Recovery Funds are subject to pre-existing limitations in other federal statutes and 

regulations and may not be used as non-federal match for other Federal programs whose 

statute or regulations bar the use of Federal funds to meet matching requirements. For 

example, expenses for the state share of Medicaid are not an eligible use. For information 

on FEMA programs, please see here.

4.5. Are governments required to submit proposed expenditures to Treasury for 

approval? [5/27]

No. Recipients are not required to submit planned expenditures for prior approval by 

Treasury. Recipients are subject to the requirements and guidelines for eligible uses 

contained in the Interim Final Rule. 

4.6. How do I know if a specific use is eligible? [5/27]

Fiscal Recovery Funds must be used in one of the four eligible use categories specified in 

the American Rescue Plan Act and implemented in the Interim Final Rule: 

a) To respond to the public health emergency or its negative economic impacts, 

including assistance to households, small businesses, and nonprofits, or aid to 

impacted industries such as tourism, travel, and hospitality;

b) To respond to workers performing essential work during the COVID-19 public 

health emergency by providing premium pay to eligible workers;

c) For the provision of government services to the extent of the reduction in revenue 

due to the COVID–19 public health emergency relative to revenues collected in 

the most recent full fiscal year prior to the emergency; and

d) To make necessary investments in water, sewer, or broadband infrastructure.
AS OF JULY 2023

21

Recipients should consult Section II of the Interim Final Rule for additional information 

on eligible uses. For recipients evaluating potential uses under (a), the Interim Final Rule 

contains a non-exclusive list of programs or services that may be funded as responding to 

COVID-19 or the negative economic impacts of the COVID-19 public health emergency, 

along with considerations for evaluating other potential uses of Fiscal Recovery Funds 

not explicitly listed. See Section II of the Interim Final Rule for additional discussion. 

For recipients evaluating potential uses under (c), the Interim Final Rule gives recipients 

broad latitude to use funds for the provision of government services to the extent of 

reduction in revenue. See FAQ #3.8 for additional discussion. 

For recipients evaluating potential uses under (b) and (d), see Sections 5 and 6. 

4.7. Do restrictions on using Coronavirus State and Local Fiscal Recovery Funds to 

cover costs incurred beginning on March 3, 2021 apply to costs incurred by the 

recipient (e.g., a State, local, territorial, or Tribal government) or to costs incurred 

by households, businesses, and individuals benefiting from assistance provided using 

Coronavirus State and Local Fiscal Recovery Funds? [6/8]

The Interim Final Rule permits funds to be used to cover costs incurred beginning on 

March 3, 2021. This limitation applies to costs incurred by the recipient (i.e., the state, 

local, territorial, or Tribal government receiving funds). However, recipients may use 

Coronavirus State and Local Fiscal Recovery Funds to provide assistance to households, 

businesses, and individuals within the eligible use categories described in the Interim 

Final Rule for economic harms experienced by those households, businesses, and 

individuals prior to March 3, 2021. For example, 

• Public Health/Negative Economic Impacts – Recipients may use Coronavirus 

State and Local Fiscal Recovery Funds to provide assistance to households – such 

as rent, mortgage, or utility assistance – for economic harms experienced or costs 

incurred by the household prior to March 3, 2021 (e.g., rental arrears from 

preceding months), provided that the cost of providing assistance to the household 

was not incurred by the recipient prior to March 3, 2021. 

• Premium Pay – Recipients may provide premium pay retrospectively for work 

performed at any time since the start of the COVID-19 public health emergency. 

Such premium pay must be “in addition to” wages and remuneration already 

received and the obligation to provide such pay must not have been incurred by 

the recipient prior to March 3, 2021. 

• Revenue Loss – The Interim Final Rule gives recipients broad latitude to use 

funds for the provision of government services to the extent of reduction in 

revenue. The calculation of lost revenue begins with the recipient’s revenue in 

the last full fiscal year prior to the COVID-19 public health emergency and 

includes the 12-month period ending December 31, 2020. However, use of funds 

for government services must be forward looking for costs incurred by the 

recipient after March 3, 2021. 
AS OF JULY 2023

22

• Investments in Water, Sewer, and Broadband – Recipients may use Coronavirus 

State and Local Fiscal Recovery Funds to make necessary investments in water, 

sewer, and broadband. See FAQ Section 6. Recipients may use Coronavirus 

State and Local Fiscal Recovery Funds to cover costs incurred for eligible 

projects planned or started prior to March 3, 2021, provided that the project costs 

covered by the Coronavirus State and Local Fiscal Recovery Funds were incurred 

after March 3, 2021. 

4.8. How can I use CSFRF/CLFRF funds to prevent and respond to crime, and support 

public safety in my community? [6/23]

Under Treasury’s Interim Final Rule, there are many ways in which the State and Local 

Fiscal Recovery Funds (“Funds”) under the American Rescue Plan Act can support 

communities working to reduce and respond to increased violence due to the pandemic. 

Among the eligible uses of the Funds are restoring of public sector staff to their prepandemic levels and responses to the public health crisis and negative economic impacts 

resulting from the pandemic. The Interim Final Rule provides several ways for recipients 

to “respond to” this pandemic-related gun violence, ranging from community violence 

intervention programs to mental health services to hiring of public safety personnel. 

Below are some examples of how Fiscal Recovery Funds can be used to address public 

safety:

• In all communities, recipients may use resources to rehire police officers and other public 

servants to restore law enforcement and courts to their pre-pandemic levels. 

Additionally, Funds can be used for expenses to address COVID-related court backlogs, 

including hiring above pre-pandemic levels, as a response to the public health emergency. 

See FAQ 2.19.

• In communities where an increase in violence or increased difficulty in accessing or 

providing services to respond to or mitigate the effects of violence, is a result of the 

pandemic they may use funds to address that harm. This spending may include: 

o Hiring law enforcement officials – even above pre-pandemic levels – or paying 

overtime where the funds are directly focused on advancing community policing 

strategies in those communities experiencing an increase in gun violence associated 

with the pandemic

o Community Violence Intervention (CVI) programs, including capacity building 

efforts at CVI programs like funding and training additional intervention workers 

o Additional enforcement efforts to reduce gun violence exacerbated by the pandemic, 

including prosecuting gun traffickers, dealers, and other parties contributing to the 

supply of crime guns, as well as collaborative federal, state, and local efforts to 

identify and address gun trafficking channels 

o Investing in technology and equipment to allow law enforcement to more efficiently 

and effectively respond to the rise in gun violence resulting from the pandemic
AS OF JULY 2023

23

As discussed in the Interim Final Rule, uses of CSFRF/CLFRF funds that respond to an 

identified harm must be related and reasonably proportional to the extent and type of 

harm experienced; uses that bear no relation or are grossly disproportionate to the type or 

extent of harm experienced would not be eligible uses. 

• Recipients may also use funds up to the level of revenue loss for government services, 

including those outlined above.

Recognizing that the pandemic exacerbated mental health and substance use disorder needs 

in many communities, eligible public health services include mental health and other 

behavioral health services, which are a critical component of a holistic public safety 

approach. This could include:

• Mental health services and substance use disorder services, including for individuals 

experiencing trauma exacerbated by the pandemic, such as: 

- Community-based mental health and substance use disorder programs that deliver 

evidence-based psychotherapy, crisis support services, medications for opioid use 

disorder, and/or recovery support

- School-based social-emotional support and other mental health services

• Referrals to trauma recovery services for crime victims.

Recipients also may use Funds to respond to the negative economic impacts of the public 

health emergency, including: 

• Assistance programs to households or populations facing negative economic impacts of 

the public health emergency, including:

- Assistance to support economic security, including for the victims of crime;

- Housing assistance, including rent, utilities, and relocation assistance; 

- Assistance with food, including Summer EBT and nutrition programs; and

- Employment or job training services to address negative economic or public 

health impacts experienced due to a worker’s occupation or level of training.

• Assistance to unemployed workers, including:

- Subsidized jobs, including for young people. Summer youth employment 

programs directly address the negative economic impacts of the pandemic on 

young people and their families and communities; 

- Programs that provide paid training and/or work experience targeted primarily to 

(1) formerly incarcerated individuals, and/or (2) communities experiencing high 

levels of violence exacerbated by the pandemic;

- Programs that provide workforce readiness training, apprenticeship or preapprenticeship opportunities, skills development, placement services, and/or 

coaching and mentoring; and

- Associated wraparound services, including for housing, health care, and food.
AS OF JULY 2023

24

Recognizing the disproportionate impact of the pandemic on certain communities, a broader 

range of services are eligible in those communities than would otherwise be available in 

communities not experiencing a pandemic-related increase in crime or gun violence. These 

eligible uses aim to address the pandemic’s exacerbation of public health and economic 

disparities and include services to address health and educational disparities, support 

neighborhoods and affordable housing, and promote healthy childhood environments. The 

Interim Final Rule provides a non-exhaustive list of eligible services in these categories.

These services automatically qualify as eligible uses when provided in Qualified Census 

Tracts (QCTs), low-income areas designated by HUD; to families in QCTs; or by Tribal 

governments. Outside of these areas, recipient governments can also identify and serve 

households, populations, and geographic areas disproportionately impacted by the pandemic.

Services under this category could include:

• Programs or services that address or mitigate the impacts of the COVID-19 public health 

emergency on education, childhood health and welfare, including:

o Summer education and enrichment programs in these communities, which include 

many communities currently struggling with high levels of violence;

o Programs that address learning loss and keep students productively engaged;

o Enhanced services for foster youths and home visiting programs; and

o Summer camps and recreation.

• Programs or services that provide or facilitate access to health and social services and 

address health disparities exacerbated by the pandemic. This includes Community 

Violence Intervention (CVI) programs, such as:

o Evidence-based practices like focused deterrence, street outreach, violence 

interrupters, and hospital-based violence intervention models, complete with 

wraparound services such as behavioral therapy, trauma recovery, job training, 

education, housing and relocation services, and financial assistance; and,

o Capacity-building efforts at CVI programs like funding more intervention workers; 

increasing their pay; providing training and professional development for intervention 

workers; and hiring and training workers to administer the programs.

Please refer to Treasury’s Interim Final Rule for additional information.

4.9. May recipients pool funds for regional projects? [7/14]

Yes, provided that the project is itself an eligible use of funds and that recipients can 

track the use of funds in line with the reporting and compliance requirements of the 

CSFRF/CLFRF. In general, when pooling funds for regional projects, recipients may 

expend funds directly on the project or transfer funds to another government that is 

undertaking the project on behalf of multiple recipients. To the extent recipients 

undertake regional projects via transfer to another government, recipients would need to 

comply with the rules on transfers specified in the Interim Final Rule, Section V. A 

recipient may transfer funds to a government outside its boundaries (e.g., county transfers 
AS OF JULY 2023

25

to a neighboring county), provided that the recipient can document that its jurisdiction 

receives a benefit proportionate to the amount contributed. 

4.10. May recipients fund a project with both ARP funds and other sources of funding 

(e.g., blending, braiding, or other pairing funding sources), including in conjunction 

with financing provided through a debt issuance? [7/14]

Cost sharing or matching funds are not required under CSFRF/CLFRF. Funds may be 

used in conjunction with other funding sources, provided that the costs are eligible costs 

under each source program and are compliant with all other related statutory and 

regulatory requirements and policies. The recipient must comply with applicable 

reporting requirements for all sources of funds supporting the CSFRF/CLFRF projects, 

and with any requirements and restrictions on the use of funds from the supplemental 

funding sources and the CSFRF/CLFRF program. Specifically, 

• All funds provided under the CSFRF/CLFRF program must be used for projects, 

investments, or services that are eligible under the CSFRF/CLFRF statute, 

Treasury’s Interim Final Rule, and guidance. See 31 CFR 35.6-8; FAQ 4.6. 

CSFRF/CLFRF funds may not be used to fund an activity that is not, in its 

entirety, an eligible use under the CSFRF/CLFRF statute, Treasury’s Interim 

Final Rule, and guidance. For example, 

o CSFRF/CLFRF funds may be used in conjunction with other sources of 

funds to make an investment in water infrastructure, which is eligible 

under the CSLFRF statute, and Treasury’s Interim Final Rule.

o CSFRF/CLFRF funds could not be used to fund the entirety of a water 

infrastructure project that was partially, although not entirely, an eligible 

use under Treasury’s Interim Final Rule. However, the recipient could use 

CSFRF/CLFRF funds only for a smaller component project that does 

constitute an eligible use, while using other funds for the remaining 

portions of the larger planned water infrastructure project that do not 

constitute an eligible use. In this case, the “project” under this program 

would be only the eligible use component of the larger project. 

• In addition, because CSFRF/CLFRF funds must be obligated by December 31, 

2024, and expended by December 31, 2026, recipients must be able to, at a 

minimum, determine and report to Treasury on the amount of CSFRF/CLFRF

funds obligated and expended and when such funds were obligated and expended. 

4.11. May Coronavirus State and Local Fiscal Recovery Funds be used to make loans or 

other extensions of credit (“loans”), including loans to small businesses and loans to 

finance necessary investments in water, sewer, and broadband infrastructure?

[7/14]

Yes. Coronavirus State and Local Fiscal Recovery Funds (“Funds”) may be used to 

make loans, provided that the loan is an eligible use and the cost of the loan is tracked 

and reported in accordance with the points below. See 31 CFR 35.6. For example, a 
AS OF JULY 2023

26

recipient may use Coronavirus State and Local Fiscal Recovery Funds to make loans to 

small businesses. See 31 CFR 35.6(b)(6). In addition, a recipient may use Funds to 

finance a necessary investment in water, sewer or broadband, as described in the Interim 

Final Rule. See 31 CFR 35.6(e). 

Funds must be used to cover “costs incurred” by the recipient between March 3, 2021, 

and December 31, 2024, and Funds must be expended by December 31, 2026. See 

Section III.D of the Interim Final Rule; 31 CFR 35.5. Accordingly, recipients must be 

able to determine the amount of Funds used to make a loan. 

• For loans that mature or are forgiven on or before December 31, 2026, the recipient 

must account for the use of funds on a cash flow basis, consistent with the approach 

to loans taken in the Coronavirus Relief Fund. 

o Recipients may use Fiscal Recovery Funds to fund the principal of the loan 

and in that case must track repayment of principal and interest (i.e., “program 

income,” as defined under 2 CFR 200). 

o When the loan is made, recipients must report the principal of the loan as an 

expense. 

o Repayment of principal may be re-used only for eligible uses, and subject to 

restrictions on timing of use of funds. Interest payments received prior to the 

end of the period of performance will be considered an addition to the total 

award and may be used for any purpose that is an eligible use of funds under 

the statute and IFR. Recipients are not subject to restrictions under 2 CFR 

200.307(e)(1) with respect to such payments. 

• For loans with maturities longer than December 31, 2026, the recipient may use 

Fiscal Recovery Funds for only the projected cost of the loan. Recipients may 

estimate the subsidy cost of the loan, which equals the expected cash flows associated 

with the loan discounted at the recipient’s cost of funding. A recipient’s cost of 

funding can be determined based on the interest rates of securities with a similar 

maturity to the cash flow being discounted that were either (i) recently issued by the 

recipient or (ii) recently issued by a unit of state, local, or Tribal government similar 

to the recipient. Recipients that have adopted the Current Expected Credit Loss 

(CECL) standard may also treat the cost of the loan as equal to the CECL-based 

expected credit losses over the life of the loan. Recipients may measure projected 

losses either once, at the time the loan is extended, or annually over the covered 

period. 

Under either approach for measuring the amount of funds used to make loans with 

maturities longer than December 31, 2026, recipients would not be subject to 

restrictions under 2 CFR 200.307(e)(1) and need not separately track repayment of 

principal or interest.

Any contribution of Fiscal Recovery Funds to a revolving loan fund must follow the 

approach described above for loans with maturities longer than December 31, 2026. In 

other words, a recipient could contribute Fiscal Recovery Funds to a revolving loan fund, 
AS OF JULY 2023

27

provided that the revolving loan fund makes loans that are eligible uses and the Fiscal 

Recovery Funds contributed represent the projected cost of loans made over the life of 

the revolving loan fund. 

4.12. May funds be used for outreach to increase uptake of federal assistance like the 

Child Tax Credit or federal programs like SNAP? [7/14]

Yes. Eligible uses to address negative economic impacts include work “to improve 

efficacy of programs addressing negative economic impacts, including through use of 

data analysis, targeted consumer outreach, improvements to data or technology 

infrastructure, and impact evaluations.” See 31 CFR 35.6(b)(10). Of note, per the 

CSFRF/CLFRF Reporting Guidance, allowable use of funds for evaluations may also 

include other types of program evaluations focused on program improvement and 

evidence building. In addition, recipients may use funds to facilitate access to health and 

social services in populations and communities disproportionately impacted by the 

COVID-19 pandemic, including benefits navigators or marketing efforts to increase 

consumer uptake of federal tax credits, benefits, or assistance programs that respond to 

negative economic impacts of the pandemic. See 31 CFR 35.6(b)(12).

5. Eligible Uses – Premium Pay

5.1. What criteria should recipients use in identifying essential workers to receive 

premium pay? 

Essential workers are those in critical infrastructure sectors who regularly perform inperson work, interact with others at work, or physically handle items handled by others.

Critical infrastructure sectors include healthcare, education and childcare, transportation, 

sanitation, grocery and food production, and public health and safety, among others, as 

provided in the Interim Final Rule. Governments receiving Fiscal Recovery Funds have 

the discretion to add additional sectors to this list, so long as the sectors are considered 

critical to protect the health and well-being of residents.

The Interim Final Rule emphasizes the need for recipients to prioritize premium pay for 

lower income workers. Premium pay that would increase a worker’s total pay above 

150% of the greater of the state or county average annual wage requires specific 

justification for how it responds to the needs of these workers.

5.2. What criteria should recipients use in identifying third-party employers to receive 

grants for the purpose of providing premium pay to essential workers? 

Any third-party employers of essential workers are eligible. Third-party contractors who 

employ essential workers in eligible sectors are also eligible for grants to provide 

premium pay. Selection of third-party employers and contractors who receive grants is at 

the discretion of recipients. 
AS OF JULY 2023

28

To ensure any grants respond to the needs of essential workers and are made in a fair and 

transparent manner, the rule imposes some additional reporting requirements for grants to 

third-party employers, including the public disclosure of grants provided. 

5.3. May recipients provide premium pay retroactively for work already performed? 

Yes. Treasury encourages recipients to consider providing premium pay retroactively for 

work performed during the pandemic, recognizing that many essential workers have not 

yet received additional compensation for their service during the pandemic.

6. Eligible Uses – Water, Sewer, and Broadband Infrastructure 

6.1. What types of water and sewer projects are eligible uses of funds? 

The Interim Final Rule generally aligns eligible uses of the Funds with the wide range of 

types or categories of projects that would be eligible to receive financial assistance 

through the Environmental Protection Agency’s Clean Water State Revolving Fund 

(CWSRF) or Drinking Water State Revolving Fund (DWSRF). 

Under the DWSRF, categories of eligible projects include: treatment, transmission and 

distribution (including lead service line replacement), source rehabilitation and 

decontamination, storage, consolidation, and new systems development.

Under the CWSRF, categories of eligible projects include: construction of publiclyowned treatment works, nonpoint source pollution management, national estuary 

program projects, decentralized wastewater treatment systems, stormwater systems, water 

conservation, efficiency, and reuse measures, watershed pilot projects, energy efficiency 

measures for publicly-owned treatment works, water reuse projects, security measures at 

publicly-owned treatment works, and technical assistance to ensure compliance with the 

Clean Water Act.

As mentioned in the Interim Final Rule, eligible projects under the DWSRF and CWSRF 

support efforts to address climate change, as well as to meet cybersecurity needs to 

protect water and sewer infrastructure. Given the lifelong impacts of lead exposure for 

children, and the widespread nature of lead service lines, Treasury also encourages 

recipients to consider projects to replace lead service lines. 

6.2. May construction on eligible water, sewer, or broadband infrastructure projects 

continue past December 31, 2024, assuming funds have been obligated prior to that 

date? 

Yes. Treasury is interpreting the requirement that costs be incurred by December 31, 

2024 to only require that recipients have obligated the funds by such date. The period of 

performance will run until December 31, 2026, which will provide recipients a 

reasonable amount of time to complete projects funded with Fiscal Recovery Funds. 
AS OF JULY 2023

29

6.3. May recipients use funds as a non-federal match for the Clean Water State 

Revolving Fund (CWSRF) or Drinking Water State Revolving Fund (DWSRF)?

Recipients may not use funds as a state match for the CWSRF and DWSRF due to 

prohibitions in utilizing federal funds as a state match in the authorizing statutes and 

regulations of the CWSRF and DWSRF. 

6.4. Does the National Environmental Policy Act (NEPA) apply to eligible infrastructure 

projects?

NEPA does not apply to Treasury’s administration of the Funds. Projects supported with 

payments from the Funds may still be subject to NEPA review if they are also funded by 

other federal financial assistance programs. 

6.5. What types of broadband projects are eligible?

The Interim Final Rule requires eligible projects to reliably deliver minimum speeds of 

100 Mbps download and 100 Mbps upload. In cases where it is impracticable due to 

geography, topography, or financial cost to meet those standards, projects must reliably 

deliver at least 100 Mbps download speed, at least 20 Mbps upload speed, and be 

scalable to a minimum of 100 Mbps download speed and 100 Mbps upload speed.

Projects must also be designed to serve unserved or underserved households and 

businesses, defined as those that are not currently served by a wireline connection that 

reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed.

6.6. For broadband investments, may recipients use funds for related programs such as 

cybersecurity or digital literacy training? 

Yes. Recipients may use funds to provide assistance to households facing negative 

economic impacts due to Covid-19, including digital literacy training and other programs 

that promote access to the Internet. Recipients may also use funds for modernization of 

cybersecurity, including hardware, software, and protection of critical infrastructure, as 

part of provision of government services up to the amount of revenue lost due to the 

public health emergency.

6.7. How do I know if a water, sewer, or broadband project is an eligible use of funds? 

Do I need pre-approval? [6/8]

Recipients do not need approval from Treasury to determine whether an investment in a 

water, sewer, or broadband project is eligible under CSFRF/CLFRF. Each recipient 

should review the Interim Final Rule (IFR), along with the preamble to the Interim Final 

Rule, in order to make its own assessment of whether its intended project meets the 

eligibility criteria in the IFR. A recipient that makes its own determination that a project 

meets the eligibility criteria as outlined in the IFR may pursue the project as a 
AS OF JULY 2023

30

CSFRF/CLFRF project without pre-approval from Treasury. Local government 

recipients similarly do not need state approval to determine that a project is eligible under 

CSFRF/CLFRF. However, recipients should be cognizant of other federal or state laws 

or regulations that may apply to construction projects independent of CSFRF/CLFRF 

funding conditions and that may require pre-approval. 

For water and sewer projects, the IFR refers to the EPA Drinking Water and Clean Water

State Revolving Funds (SRFs) for the categories of projects and activities that are eligible 

for funding. Recipients should look at the relevant federal statutes, regulations, and 

guidance issued by the EPA to determine whether a water or sewer project is eligible. Of 

note, the IFR does not incorporate any other requirements contained in the federal 

statutes governing the SRFs or any conditions or requirements that individual states may 

place on their use of SRFs.

6.8. For broadband infrastructure investments, what does the requirement that 

infrastructure “be designed to” provide service to unserved or underserved 

households and businesses mean? [6/17]

Designing infrastructure investments to provide service to unserved or underserved 

households or businesses means prioritizing deployment of infrastructure that will bring 

service to households or businesses that are not currently serviced by a wireline 

connection that reliably delivers at least 25 Mbps download speed and 3 Mbps of upload 

speed. To meet this requirement, states and localities should use funds to deploy 

broadband infrastructure projects whose objective is to provide service to unserved or 

underserved households or businesses. These unserved or underserved households or 

businesses do not need to be the only ones in the service area funded by the project.

6.9. For broadband infrastructure to provide service to “unserved or underserved 

households or businesses,” must every house or business in the service area be 

unserved or underserved? [6/17]

No. It suffices that an objective of the project is to provide service to unserved or 

underserved households or businesses. Doing so may involve a holistic approach that 

provides service to a wider area in order, for example, to make the ongoing service of 

unserved or underserved households or businesses within the service area economical. 

Unserved or underserved households or businesses need not be the only households or 

businesses in the service area receiving funds. 

6.10. May recipients use payments from the Funds for “middle mile” broadband 

projects? [6/17]

Yes. Under the Interim Final Rule, recipients may use payments from the Funds for 

“middle-mile projects,” but Treasury encourages recipients to focus on projects that will 

achieve last-mile connections—whether by focusing on funding last-mile projects or by 

ensuring that funded middle-mile projects have potential or partnered last-mile networks 

that could or would leverage the middle-mile network.
AS OF JULY 2023

31

6.11. For broadband infrastructure investments, what does the requirement to “reliably” 

meet or exceed a broadband speed threshold mean? [6/17]

In the Interim Final Rule, the term “reliably” is used in two places: to identify areas that 

are eligible to be the subject of broadband infrastructure investments and to identify 

expectations for acceptable service levels for broadband investments funded by the 

Coronavirus State and Local Fiscal Recovery Funds. In particular:

• The IFR defines “unserved or underserved households or businesses” to mean one 

or more households or businesses that are not currently served by a wireline 

connection that reliably delivers at least 25 Mbps download speeds and 3 Mbps of 

upload speeds.

• The IFR provides that a recipient may use Coronavirus State and Local Fiscal 

Recovery Funds to make investments in broadband infrastructure that are 

designed to provide service to unserved or underserved households or businesses 

and that are designed to, upon completion: (i) reliably meet or exceed 

symmetrical 100 Mbps download speed and upload speeds; or (ii) in limited 

cases, reliably meet or exceed 100 Mbps download speed and between 20 Mbps 

and 100 Mbps upload speed and be scalable to a minimum of 100 Mbps download 

and upload speeds. 

The use of “reliably” in the IFR provides recipients with significant discretion to assess 

whether the households and businesses in the area to be served by a project have access 

to wireline broadband service that can actually and consistently meet the specified 

thresholds of at least 25Mbps/3Mbps—i.e., to consider the actual experience of current 

wireline broadband customers that subscribe to services at or above the 25 Mbps/3 Mbps 

threshold. Whether there is a provider serving the area that advertises or otherwise 

claims to offer speeds that meet the 25 Mbps download and 3 Mbps upload speed 

thresholds is not dispositive.

When making these assessments, recipients may choose to consider any available data, 

including but not limited to documentation of existing service performance, federal 

and/or state-collected broadband data, user speed test results, interviews with residents 

and business owners, and any other information they deem relevant. In evaluating such 

data, recipients may take into account a variety of factors, including whether users 

actually receive service at or above the speed thresholds at all hours of the day, whether 

factors other than speed such as latency or jitter, or deterioration of the existing 

connections make the user experience unreliable, and whether the existing service is 

being delivered by legacy technologies, such as copper telephone lines (typically using 

Digital Subscriber Line technology) or early versions of cable system technology 

(DOCSIS 2.0 or earlier). 
AS OF JULY 2023

32

The IFR also provides recipients with significant discretion as to how they will assess 

whether the project itself has been designed to provide households and businesses with 

broadband services that meet, or even exceed, the speed thresholds provided in the rule.

6.12. May recipients use Funds for pre-project development for eligible water, sewer, and 

broadband projects? [6/23]

Yes. To determine whether Funds can be used on pre-project development for an eligible 

water or sewer project, recipients should consult whether the pre-project development use 

or cost is eligible under the Drinking Water and Clean Water State Revolving Funds 

(CWSRF and DWSRF, respectively). Generally, the CWSRF and DWSRF often allow 

for pre-project development costs that are tied to an eligible project, as well as those that 

are reasonably expected to lead to a project. For example, the DWSRF allows for 

planning and evaluations uses, as well as numerous pre-project development costs, 

including costs associated with obtaining project authorization, planning and design, and 

project start-up like training and warranty for equipment. Likewise, the CWSRF allows

for broad pre-project development, including planning and assessment activities, such as 

cost and effectiveness analyses, water/energy audits and conservation plans, and capital 

improvement plans. 

Similarly, pre-project development uses and costs for broadband projects should be tied 

to an eligible broadband project or reasonably expected to lead to such a project. For 

example, pre-project costs associated with planning and engineering for an eligible 

broadband infrastructure build-out is considered an eligible use of funds, as well as 

technical assistance and evaluations that would reasonably be expected to lead to 

commencement of an eligible project (e.g., broadband mapping for the purposes of 

finding an eligible area for investment).

All funds must be obligated within the statutory period between March 3, 2021 and 

December 31, 2024, and expended to cover such obligations by December 31, 2026.

6.13. May State and Local Fiscal Recovery Funds be used to support energy or 

electrification infrastructure that would be used to power new water treatment 

plants and wastewater systems? [7/14]

The EPA’s Overview of Clean Water State Revolving Fund Eligibilities describes 

eligible energy-related projects. This includes a “[p]ro rata share of capital costs of 

offsite clean energy facilities that provide power to a treatment works.” Thus, State and 

Local Fiscal Recovery Funds may be used to finance the generation and delivery of clean 

power to a wastewater system or a water treatment plant on a pro-rata basis. If the 

wastewater system or water treatment plant is the sole user of the clean energy, the full 

cost would be considered an eligible use of funds. If the clean energy provider provides 

power to other entities, only the proportionate share used by the water treatment plant or 

wastewater system would be an eligible use of State and Local Fiscal Recovery Funds. 
AS OF JULY 2023

33

6.14. How should states and local governments assess whether a stormwater management 

project, such as a culvert replacement, is an eligible project for State and Local 

Fiscal Recovery Funds? [7/14]

FAQ 6.7 describes the overall approach that recipients may take to evaluate the eligibility 

of water or sewer projects. For stormwater management projects specifically, as noted in 

the EPA’s Overview of Clean Water State Revolving Fund Eligibilities, “Stormwater 

projects must have a water quality benefit.” Thus, to be eligible under CSFRF/CLFRF, 

stormwater management projects should be designed to incorporate water quality benefits 

consistent with the goals of the Clean Water Act. Summary of the Clean Water Act.

6.15. May recipients use Funds for road repairs and upgrades that occur in connection 

with an eligible water or sewer project? [7/14]

Yes, recipients may use State and Local Fiscal Recovery Funds for road repairs and 

upgrades directly related to an eligible water or sewer project. For example, a recipient 

could use Funds to repair or re-pave a road following eligible sewer repair work beneath 

it. However, use of Funds for general infrastructure projects is subject to the limitations 

described in FAQ 4.2. Water and sewer infrastructure projects are often a single 

component of a broader transportation infrastructure project, for example, the 

implementation of stormwater infrastructure to meet Clean Water Act established water 

quality standards. In this example, the components of the infrastructure project that 

interact directly with the stormwater infrastructure project may be funded by Fiscal 

Recovery Funds. 

6.16. May Funds be used to build or upgrade broadband connections to schools or 

libraries? [7/14]

As outlined in the IFR, recipients may use Fiscal Recovery Funds to invest in broadband 

infrastructure that, wherever it is practicable to do so, is designed to deliver service that 

reliably meets or exceeds symmetrical upload and download speeds of 100 Mbps to 

households or businesses that are not currently serviced by a wireline connection that 

reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed. Treasury 

interprets “businesses” in this context broadly to include non-residential users of 

broadband, including private businesses and institutions that serve the public, such as 

schools, libraries, healthcare facilities, and public safety organizations. 

6.17. Are eligible infrastructure projects subject to the Davis-Bacon Act? [7/14]

The Davis-Bacon Act requirements (prevailing wage rates) do not apply to projects 

funded solely with award funds from the CSFRF/CLFRF program, except for 

CSFRF/CLFRF-funded construction projects undertaken by the District of Columbia. 

The Davis-Bacon Act specifically applies to the District of Columbia when it uses federal 

funds (CSFRF/CLFRF funds or otherwise) to enter into contracts over $2,000 for the 

construction, alteration, or repair (including painting and decorating) of public buildings 

or public works. Recipients may be otherwise subject to the requirements of the Davis-
AS OF JULY 2023

34

Bacon Act, when CSFRF/CLFRF award funds are used on a construction project in 

conjunction with funds from another federal program that requires enforcement of the 

Davis-Bacon Act. Additionally, corollary state prevailing-wage-in-construction laws 

(commonly known as “baby Davis-Bacon Acts”) may apply to projects. Please refer to 

FAQ 4.10 concerning projects funded with both CSFRF/CLFRF funds and other sources 

of funding. 

Treasury has indicated in its Interim Final Rule that it is important that necessary 

investments in water, sewer, or broadband infrastructure be carried out in ways that 

produce high-quality infrastructure, avert disruptive and costly delays, and promote 

efficiency. Treasury encourages recipients to ensure that water, sewer, and broadband 

projects use strong labor standards, including project labor agreements and community 

benefits agreements that offer wages at or above the prevailing rate and include local hire 

provisions, not only to promote effective and efficient delivery of high-quality 

infrastructure projects, but also to support the economic recovery through strong 

employment opportunities for workers. Using these practices in construction projects 

may help to ensure a reliable supply of skilled labor that would minimize disruptions, 

such as those associated with labor disputes or workplace injuries.

Treasury has also indicated in its reporting guidance that recipients will need to provide 

documentation of wages and labor standards for infrastructure projects over $10 million, 

and that that these requirements can be met with certifications that the project is in 

compliance with the Davis-Bacon Act (or related state laws, commonly known as “baby 

Davis-Bacon Acts”) and subject to a project labor agreement. Please refer to the 

Reporting and Compliance Guidance, page 21, for more detailed information on the 

reporting requirement.

7. Non-Entitlement Units (NEUs)

Answers to frequently asked questions on distribution of funds to NEUs can be found in 

this FAQ supplement, which is regularly updated.

8. Ineligible Uses

8.1. What is meant by a pension “deposit”? Can governments use funds for routine

pension contributions for employees whose payroll and covered benefits are eligible 

expenses?

Treasury interprets “deposit” in this context to refer to an extraordinary payment into a 

pension fund for the purpose of reducing an accrued, unfunded liability. More 

specifically, the interim final rule does not permit this assistance to be used to make a 

payment into a pension fund if both: (1) the payment reduces a liability incurred prior to 

the start of the COVID-19 public health emergency, and (2) the payment occurs outside 

the recipient’s regular timing for making such payments. 
AS OF JULY 2023

35

Under this interpretation, a “deposit” is distinct from a “payroll contribution,” which 

occurs when employers make payments into pension funds on regular intervals, with 

contribution amounts based on a pre-determined percentage of employees’ wages and 

salaries. In general, if an employee’s wages and salaries are an eligible use of Fiscal 

Recovery Funds, recipients may treat the employee’s covered benefits as an eligible use 

of Fiscal Recovery Funds.

8.2. May recipients use Fiscal Recovery Funds to fund Other Post-Employment Benefits 

(OPEB)? [6/8]

OPEB refers to benefits other than pensions (see, e.g., Governmental Accounting 

Standards Board, “Other Post-Employment Benefits”). Treasury has determined that 

Sections 602(c)(2)(B) and 603(c)(2), which refer only to pensions, do not prohibit 

CSFRF/CLFRF recipients from funding OPEB. Recipients of either the CSFRF/CLFRF

may use funds for eligible uses, and a recipient seeking to use CSFRF/CLFRF funds for 

OPEB contributions would need to justify those contributions under one of the four 

eligible use categories.

9. Reporting

On November 5, 2021, Treasury released updated Guidance on Recipient Compliance and 

Reporting Responsibilities for the Coronavirus State and Local Fiscal Recovery Funds. 

Recipients should consult this guidance for additional detail and clarification on recipients’ 

compliance and reporting responsibilities. A user guide will be provided with additional 

information associated with the submission of reports. .

9.1. What records must be kept by governments receiving funds?

Financial records and supporting documents related to the award must be retained for a 

period of five years after all funds have been expended or returned to Treasury, 

whichever is later. This includes those which demonstrate the award funds were used for 

eligible purposes in accordance with the ARPA, Treasury’s regulations implementing 

those sections, and Treasury’s guidance on eligible uses of funds.

9.2. What reporting will be required, and when will the first report be due?2

Recipients will be required to submit an interim report, project and expenditure reports, 

and annual Recovery Plan Performance Reports as specified below, regarding their 

utilization of Coronavirus State and Local Fiscal Recovery Funds. 

Interim reports: States (defined to include the District of Columbia), territories, 

metropolitan cities, counties, and Tribal governments will be required to submit one 

2 This question was updated on November 15, 2021
AS OF JULY 2023

36

interim report. The interim report will include a recipient’s expenditures by category at 

the summary level and for states, information related to distributions to non-entitlement 

units of local government must also be included in the interim report. The interim report 

covered activity from the date of award to July 31, 2021 and were due to Treasury by 

August 31, 2021 or 60 days after receiving funding if funding was received by October 

15, 2021. Non-entitlement units of local government were not required to submit an 

interim report.

Project and Expenditure reports: State (defined to include the District of Columbia), 

territorial, metropolitan city, county, and Tribal governments will be required to submit 

project and expenditure reports. This report will include financial data, information on 

contracts and subawards over $50,000, types of projects funded, and other information 

regarding a recipient’s utilization of award funds. 

Reports will be required quarterly for the following recipients:

• States and territories

• Metropolitan cities and counties with population over 250,000

• Metropolitan cities and counties with population less than 250,000 that received 

an award of more than $10 million

• Tribal governments that received an award of more than $30 million.

The initial project and expenditure report for quarterly recipients will be due January 31, 

2022 and will cover the period of March 3, 2021 to December 31, 2021. The subsequent 

quarterly reports will cover one calendar quarter and must be submitted to Treasury 

within 30 days after the end of each calendar quarter. 

Reports will be required annually for the following recipients:

• Metropolitan cities and counties with population less than 250,000 that received 

an award less than $10 million,

• Tribal governments that received an award less than $30 million

• Non-entitlement units of government

The initial project and expenditure report for annual filers will be due April 30, 2022 and 

will cover the period of March 3, 2021 to March 31, 2022. The subsequent annual 

reports must be submitted to Treasury by April 30 each year.

The reports will include the same general data as those submitted by recipients of the 

Coronavirus Relief Fund, with some modifications to expenditure categories and the 

addition of data elements related to specific eligible uses. 

Recovery Plan Performance Reports: States (defined to include the District of Columbia), 

territories, metropolitan cities, and counties with a population that exceeds 250,000 

residents will also be required to submit an annual Recovery Plan Performance Report to 

Treasury. This report will include descriptions of the projects funded and information on 

the performance indicators and objectives of each award, helping local residents 

understand how their governments are using the substantial resources provided by 
AS OF JULY 2023

37

Coronavirus State and Local Fiscal Recovery Funds program. The initial Recovery Plan 

Performance Report will cover activity from date of award to July 31, 2021 was due to 

Treasury by August 31, 2021 or 60 days after receiving funding. Thereafter, the 

Recovery Plan Performance Reports will cover a 12-month period and recipients will be 

required to submit the report to Treasury within 30 days after the end of the 12-month 

period. The second Recovery Plan Performance Report will cover the period from July 1, 

2021 to June 30, 2022 and must be submitted to Treasury by July 31, 2022. Each annual 

Recovery Plan Performance Report must be posted on the public-facing website of the 

recipient. Local governments with fewer than 250,000 residents, Tribal governments, 

and non-entitlement units of local government are not required to develop a Recovery 

Plan Performance Report. 

Please see the Guidance on Recipient Compliance and Reporting Responsibilities for 

more information.

9.3. What provisions of the Uniform Guidance for grants apply to these funds? Will the 

Single Audit requirements apply?

Most of the provisions of the Uniform Guidance (2 CFR Part 200) apply to this program, 

including the Cost Principles and Single Audit Act requirements. Recipients should refer 

to the Assistance Listing for detail on the specific provisions of the Uniform Guidance 

that do not apply to this program. The Assistance Listing will be available on 

beta.SAM.gov.

9.4. Once a recipient has identified a reduction in revenue, how will Treasury track use 

of funds for the provision of government services? [6/8]

The ARPA establishes four categories of eligible uses and further restrictions on the use 

of funds to ensure that Fiscal Recovery Funds are used within the four eligible use

categories. The Interim Final Rule implements these restrictions, including the scope of 

the eligible use categories and further restrictions on tax cuts and deposits into 

pensions. Reporting requirements will align with this structure.

Consistent with the broad latitude provided to recipients to use funds for government 

services to the extent of the reduction in revenue, recipients will be required to submit a 

description of services provided. As discussed in IFR, these services can include a broad 

range of services but may not be used directly for pension deposits, contributions to 

reserve funds, or debt service. Recipients may use sources of funding other than Fiscal 

Recovery Funds to make deposits to pension funds, contribute to reserve funds, and pay 

debt service, including during the period of performance for the Fiscal Recovery Fund 

award.

For recipients using Fiscal Recovery Funds to provide government services to the extent 

of reduction in revenue, the description of government services reported to Treasury may 

be narrative or in another form, and recipients are encouraged to report based on their 

existing budget processes and to minimize administrative burden. For example, a 
AS OF JULY 2023

38

recipient with $100 in revenue replacement funds available could indicate that $50 were 

used for personnel costs and $50 were used for pay-go building of sidewalk 

infrastructure.

In addition to describing the government services provided to the extent of reduction in 

revenue, all recipients will also be required to indicate that Fiscal Recovery Funds are not 

used directly to make a deposit in a pension fund. Further, recipients subject to the tax 

offset provision will be required to provide information necessary to implement the 

Interim Final Rule, as described in the Interim Final Rule. Treasury does not anticipate 

requiring other types of reporting or recordkeeping on spending in pensions, debt service, 

or contributions to reserve funds.

These requirements are further detailed in the guidance on reporting requirements for the 

Fiscal Recovery Funds available here.

9.5. What is the Assistance Listing and Catalog of Federal Domestic Assistance (CFDA) 

number for the program? [6/8]

The Assistance Listing for the Coronavirus State and Local Fiscal Recovery Funds 

(CSLFRF) was published May 28, 2021 on SAM.gov. This includes the final CFDA 

Number for the program, 21.027.

The assistance listing includes helpful information including program purpose, statutory 

authority, eligibility requirements, and compliance requirements for recipients. The 

CFDA number is the unique 5-digit code for each type of federal assistance, and can be 

used to search for program information, including funding opportunities, spending on 

usaspending.gov, or audit results through the Federal Audit Clearinghouse. 

To expedite payments and meet statutory timelines, Treasury issued initial payments 

under an existing CFDA number. If you have already received funds or captured the 

initial CFDA number in your records, please update your systems and reporting to reflect 

the final CFDA number 21.027. Recipients must use the final CFDA number for all 

financial accounting, audits, subawards, and associated program reporting 

requirements.

To ensure public trust, Treasury expects all recipients to serve as strong stewards of these 

funds. This includes ensuring funds are used for intended purposes and recipients have in 

place effective financial management, internal controls, and reporting for transparency 

and accountability. 

Please see Treasury’s Interim Final Rule and the Guidance on Recipient Compliance and 

Reporting Responsibilities for more information. 

10. Miscellaneous 
AS OF JULY 2023

39

10.1. May governments retain assets purchased with Fiscal Recovery Funds? If so, what 

rules apply to the proceeds of disposition or sale of such assets?

Yes, if the purchase of the asset was consistent with the limitations on the eligible use of 

funds. If such assets are disposed of prior to December 31, 2024, the proceeds would be 

subject to the restrictions on the eligible use of payments.

10.2. Can recipients use funds for administrative purposes?

Recipients may use funds to cover the portion of payroll and benefits of employees 

corresponding to time spent on administrative work necessary due to the COVID–19 

public health emergency and its negative economic impacts. This includes, but is not 

limited to, costs related to disbursing payments of Fiscal Recovery Funds and managing 

new grant programs established using Fiscal Recovery Funds.

10.3. Are recipients required to remit interest earned on CSFRF/CLFRF payments made 

by Treasury? [5/27, updated 7/14]

No. CSFRF/CLFRF payments made by Treasury to states, territories, and the District of 

Columbia are not subject to the requirement of the Cash Management Improvement Act 

and Treasury’s implementing regulations at 31 CFR part 205 to remit interest to 

Treasury. CSFRF/CLFRF payments made by Treasury to local governments and Tribes 

are not subject to the requirement of 2 CFR 200.305(b)(8)–(9) to maintain balances in an 

interest-bearing account and remit payments to Treasury. Moreover, interest earned on 

CSFRF/CLFRF payments is not subject to program restrictions. Finally, States may 

retain interest on payments made by Treasury to the State for distribution to NEUs that is 

earned before funds are distributed to NEUs, provided that the State adheres to the 

statutory requirements and Treasury’s guidance regarding the distribution of funds to 

NEUs. Such interest is also not subject to program restrictions. 

Among other things, States and other recipients may use earned income to defray the 

administrative expenses of the program, including with respect to NEUs.

10.4. Is there a deadline to apply for funds? [5/27]

The Interim Final Rule requires that costs be incurred by December 31, 2024. Direct

recipients are encouraged to apply as soon as possible. For direct recipients other than 

Tribal governments, there is not a specific application deadline. 

Tribal governments do have deadlines to complete the application process and should 

visit www.treasury.gov/SLFRPTribal for guidance on applicable deadlines.

Non-entitlement units of local government should contact their state government for 

information on applicable deadlines.
AS OF JULY 2023

40

10.5. May recipients use funds to cover the costs of consultants to assist with managing 

and administering the funds? [6/8]

Yes. Recipients may use funds for administering the CSFRF/CLFRF program, including 

costs of consultants to support effective management and oversight, including 

consultation for ensuring compliance with legal, regulatory, and other requirements.

11. Operations 

11.1. How do I know if my entity is eligible?

The Coronavirus State and Local Fiscal Recovery Funds American Rescue Plan Act of 

2021 set forth the jurisdictions eligible to receive funds under the program, which are:

• States and the District of Columbia

• Territories

• Tribal governments

• Counties

• Metropolitan cities (typically, but not always, those with populations over 50,000)

• Non-entitlement units of local government, or smaller local governments 

(typically, but not always, those with populations under 50,000)

11.2. How does an eligible entity request payment? 

Eligible entities (other than non-entitlement units) must submit their information to the 

Treasury Submission Portal. Please visit the Coronavirus State and Local Fiscal 

Recovery Fund website for more information on the submission process.

11.3. I cannot log into the Treasury Submission Portal or am having trouble navigating 

it. Who can help me?

If you have questions about the Treasury Submission Portal or for technical support, 

please email covidreliefitsupport@treasury.gov. 

11.4. What do I need to do to receive my payment?

All eligible payees are required to have a DUNS Number previously issued by Dun & 

Bradstreet (https://www.dnb.com/). 

All eligible payees are also required to have an active registration with the System for 

Award Management (SAM) (https://www.sam.gov).

And eligible payees must have a bank account enabled for Automated Clearing House 

(ACH) direct deposit. Payees with a Wire account are encouraged to provide that 

information as well.
AS OF JULY 2023

41

More information on these and all program pre-submission requirements can be found on 

the Coronavirus State and Local Fiscal Recovery Fund website.

11.5. Why is Treasury employing id.me for the Treasury Submission Portal?

ID.me is a trusted technology partner to multiple government agencies and healthcare 

providers. It provides secure digital identity verification to those government agencies 

and healthcare providers to make sure you're you – and not someone pretending to be you 

– when you request access to online services. All personally identifiable information 

provided to ID.me is encrypted and disclosed only with the express consent of the user. 

Please refer to ID.me Contact Support for assistance with your ID.me account. Their 

support website is https://help.id.me.

11.6. Why is an entity not on the list of eligible entities in Treasury Submission Portal?

The ARPA statute lays out which governments are eligible for payments. The list of 

entities within the Treasury Submission Portal includes entities eligible to receive a direct 

payment of funds from Treasury, which include states (defined to include the District of 

Columbia), territories, Tribal governments, counties, and metropolitan cities. 

Eligible non-entitlement units of local government will receive a distribution of funds 

from their respective state government and should not submit information to the Treasury 

Submission Portal.

If you believe an entity has been mistakenly left off the eligible entity list, please email 

SLFRP@treasury.gov.

11.7. What is an Authorized Representative?

An Authorized Representative is an individual with legal authority to bind the 

government entity (e.g., the Chief Executive Officer of the government entity). An 

Authorized Representative must sign the Acceptance of Award terms for it to be valid. 

11.8. How does a Tribal government determine their allocation? 

Tribal governments will receive information about their allocation when the submission 

to the Treasury Submission Portal is confirmed to be complete and accurate. 

11.9. How do I know the status of my request for funds (submission)?

Entities can check the status of their submission at any time by logging into Treasury 

Submission Portal. 

11.10. My Treasury Submission Portal submission requires additional 

information/correction. What is the process for that?
AS OF JULY 2023

42

If your Authorized Representative has not yet signed the award terms, you can edit your 

submission with in the into Treasury Submission Portal. If your Authorized 

Representative has signed the award terms, please email SLFRP@treasury.gov to request 

assistance with updating your information.

11.11. My request for funds was denied. How do I find out why it was denied or appeal the 

decision?

Please check to ensure that no one else from your entity has applied, causing a duplicate 

submission. Please also review the list of all eligible entities on the Coronavirus State 

and Local Fiscal Recovery Fund website.

If you still have questions regarding your submission, please email 

SLFRP@treasury.gov.

11.12. When will entities get their money?

Before Treasury is able to execute a payment, a representative of an eligible government 

must submit the government’s information for verification through the Treasury 

Submission Portal. The verification process takes approximately four business days. If 

any errors are identified, the designated point of contact for the government will be 

contacted via email to correct the information before the payment can proceed. Once 

verification is complete, the designated point of contact of the eligible government will 

receive an email notifying them that their submission has been verified. Payments are 

generally scheduled for the next business day after this verification email, though funds 

may not be available immediately due to processing time of their financial institution. 

11.13. How does a local government entity provide Treasury with a notice of transfer of 

funds to its State? 

For more information on how to provide Treasury with notice of transfer to a state, please 

email SLRedirectFunds@treasury.gov. 

12. Tribal Governments 

12.1. Do Treasury’s pandemic recovery program awards terms and conditions impose 

civil rights laws on Tribes? 

The award terms and conditions for Treasury’s pandemic recovery programs, including the 

CSFRF, do not impose antidiscrimination requirements on Tribal governments beyond what 

would otherwise apply under federal law. Treasury is amending its reporting requirements with 

respect to the CSFRF, Treasury’s Emergency Rental Assistance Program, and Homeowner 

Assistance Fund to reflect this clarification.
AS OF JULY 2023

43

Legend

Included in the Interim Final Rule Definition of General Revenue

 Excluded from the Interim Final Rule Definition of General Revenue

Revenue

General Revenue

Intergovernmental 

Revenue

From the 

Federal 

Government

From the 

State 

Government

From Local 

Governments

General Revenue from 

Own Sources

Current 

Charges

Examples. Revenues From: 

-Airports

-Education Institutions (K-12 or 

Higher Ed)

-Highways or Tolls

-Public Hospitals

-Public Housing

-Natural Resources

-Parking Facilities

-Parks and Recreation

-Ports

-Sewer or Solid Waste Systems

Tax 

Revenue

Examples. Revenues From:

-Alcoholic Beverage License or Sales Taxes

-Amusements License or Sales Taxes

-Corporate Income Taxes

-Corporate License Taxes

-Death and Gift Taxes

-Documentary and Stock Transfer Taxes

-General Sales and Gross Receipts Taxes

-Individual Income Taxes

-Insurance Premium Sales Taxes

-Hunting and Fishing License Taxes

-Motor Fuels Sales Taxes

-Motor Vehicle License Taxes

-Motor Vehicle Operations License Taxes

-Occupation and Business License Taxes

-Pari-mutuels Sales Taxes

-Property Taxes 

-Public Utilities License or Sales Taxes

-Severance Taxes

-Tobacco Products Sales Taxes

Miscellanous 

General Revenue

Examples. Revenues From:

-Dividends or Interest 

Earnings

-Donations from Private 

Sources

-Fines and Forfeits

-Lottery

-Rents

-Royalties

-Sale of Property

-Special Assessments

Utility Revenue

Specifically includes revenues from electric power systems, 

gas power systems, public mass transit systems, and water 

supply systems.

Social Insurance Trust 

Revenue

Examples. Revenues From:

Public Employee Retirement Systems

Unemployment Compensation Systems

Workers' Compensation Systems

Other State or Local Social Insurance Programs

Liquor Store 

Revenue Tribal Enterprise Revenue*

*While Tribal Enterprise Revenue is not 

within the scope of the Census Bureau’s 

Annual Survey of State and Local 

Government Finances, Tribal governments 

may include enterprise revenue in calculating 

revenue loss under the Interim Final Rule.

Legend

Included in the Interim Final Rule Definition of General Revenue

 Excluded from the Interim Final Rule Definition of General Revenue

Revenue is Net of Refunds and Other Correcting Transactions, and Excludes:

-Intragovernmental transfers

-Proceeds from issuance of debt 

-Proceeds from the sale of investments 

-Proceeds from agency or private trust transactions

Appendix: Interim Final Rule Definition of General Revenue Within the Census Bureau Classification Structure of Revenue

Source: U.S. Bureau of the Census Government Finance and Employment Classification Manual, 2006; Annual Survey of State and Local Government Finances