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1

Coronavirus State and Local Fiscal Recovery Funds

Frequently Asked Questions

This document contains answers to Frequently Asked Questions (FAQs) regarding the Coronavirus 

State and Local Fiscal Recovery Funds (SLFRF, or Fiscal Recovery Funds) program. The 2022

final rule became effective April 1, 2022. On December 29, 2022, Congress amended the SLFRF 

program in the Consolidated Appropriations Act, 2023 (2023 CAA) to provide state, local, 

territorial and Tribal governments more flexibility to use SLFRF funds to provide emergency relief 

from natural disasters, build critical transportation infrastructure, and support community 

development. On August 10, 2023, Treasury released an interim final rule implementing these new 

eligible uses; this interim final rule was published in the Federal Register on September 20, 2023.

Generally, the 2023 CAA did not alter the existing eligible uses, and recipients may continue to use 

SLFRF funds in accordance with the 2022 final rule. 

In November 2023, Treasury issued the Obligation interim final rule (Obligation IFR) to address 

recipients’ questions and comments regarding the definition of obligation. The Obligation IFR 

clarifies the definition of “obligation” in Treasury’s implementing regulations for the SLFRF 

program and provides related guidance to give additional flexibility and clarity to recipients to 

support their use of SLFRF funds.

The following FAQs include existing FAQs that address questions regarding the 2022 final rule, 

existing FAQs that have been updated to address the new eligible uses discussed in the 2023

interim final rule and the guidance in the Obligation IFR, and new FAQs that address the new 

eligible uses discussed in the 2023 interim final rule.

Treasury intends to update this document periodically in response to questions received from 

stakeholders. Previously, this document was named “2022 Final Rule Frequently Asked 

Questions.” The title has been updated to “State and Local Fiscal Recovery Funds Frequently 

Asked Questions.” 

Two tables are provided below: (1) a revision table to assist in identifying the FAQs that are new or 

have been updated, including those FAQs that are new or have been updated to address the 2023 

interim final rule; and (2) a table of key links to assist in accessing other program information. For

general questions about the SLFRF program, please email SLFRF@treasury.gov.

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

of local government (NEUs) can be found in this FAQ supplement.

Answers to frequently asked questions on the taxability and reporting of payments from SLFRF 

can be found in this FAQ issued by the IRS.

Answers to frequently asked questions that are unique to the 2021 interim final rule remain 

available at 2021 Interim Final Rule: Frequently Asked Questions.
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Throughout these FAQs, Treasury may refer readers to relevant sections of the Overview of the 

2022 Final Rule and the Overview of the 2023 Interim Final Rule. The overviews provide a 

summary of major provisions of the 2023 interim final rule and 2022 final rule, respectively, for 

informational purposes and are intended as brief, simplified user guides to the 2022 final rule and 

2023 interim final rule provisions. The descriptions provided in the overviews summarize key 

provisions of the 2022 final rule and 2023 interim final rule but are non-exhaustive, do not describe 

all of the terms and conditions associated with the use of SLFRF funds, and do not describe all 

requirements that may apply to these award funds. Any SLFRF funds received are subject to the 

terms and conditions of the agreement entered into by Treasury and the respective jurisdiction, 

which incorporate the provisions of the 2022 final rule, the 2023 interim final rule, and the 

guidance that implements this program.

FAQ Categorization

Version Date Category FAQ #

1.0 April 27, 2022 FAQs retained with 

slight modifications 

from the 2021 Interim 

Final Rule: Frequently 

Asked Questions

document (please note 

that FAQ numbering 

has changed between 

the two documents)

#1.1 – #1.2, #1.4 – 1.7, #2.10, #2.12 

– #2.13, #3.8 – #3.13, #4.3, #4.5, 

#6.10 – #6.11, #6.14, #8.1, #8.3, 

#10.1 – #10.2, #11.1 – 11.3, #11.6 –

11.12, #12.1 – 12.2

1.0 April 27, 2022 New or Substantially 

Updated FAQs 

#1.3, #1.8, #2.1 – #2.9, #2.11, #2.14 

– #2.24, #3.1 – 3.7, #3.14, #4.1 –

#4.2, #4.4, #4.6, #4.7 – #4.10, #5.1 –

#5.4, #6.1 – #6.9, #6.12 – #6.13, 

#6.15 – #6.16, #8.2, #11.4 – #11.5, 

Section 13

2.0 July 27, 2022 Updated FAQs #2.14, #3.1, #4.9

2.0 July 27, 2022 New FAQs #6.17 - #6.20, #13.13 - #13.17

2.1 April 10, 2023 New FAQ #4.11

3.0 February 1, 2024 FAQs updated to 

address the 2023 

Interim Final Rule

#2.6, #3.1, #3.3, #4.1, #4.2, #4.3, 

#4.4, #4.5, #4.6, #4.9, #4.11, #6.3, 

#6.12, #6.13, #6.15, #6.18, #6.20, 

#13.16 

3.0 February 1, 2024 FAQ updated to 

address the Obligation 

Interim Final Rule

#13.17

3.0 February 1, 2024 New FAQs Section 14, Section 15, Section 16
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SLFRF Resources

Item Description

SLFRF Homepage SLFRF program website

2021 Interim Final Rule Text of the 2021 interim final rule

2022 Final Rule Text of the 2022 final rule

Overview of the 2022 Final Rule Summary overview of 2022 final rule

2022 Final Rule Webinar Recording of a webinar describing the 2022 

final rule 

2022 Final Rule Webinar Slides Slide deck associated with the 2022 Final Rule 

Webinar

2023 Interim Final Rule Text of the 2023 interim final rule

Overview of the 2023 Interim Final Rule Summary overview of the 2023 interim final 

rule

Obligation Interim Final Rule Text of the obligation interim final rule

Obligation Interim Final Rule Quick 

Reference Guide

Summary overview of the obligation interim 

final rule

Non-Entitlement Units (NEUs) FAQs FAQs associated with the distribution of SLFRF 

funds to NEUs

Tribal Government Fact Sheet Summary of the 2022 final rule for Tribal 

Governments

Affordable Housing How-To Guide Provides guidance on how to use SLFRF funds 

for affordable housing production and 

preservation

Statement Regarding Compliance with the 

Coronavirus State and Local Fiscal Recovery 

Funds Interim Final Rule and Final Rule

Provides guidance on compliance with the 2022 

final rule and 2021 interim final rule

Tool for Determining Low and Moderate 

Income (LMI) Households

Microsoft Excel file containing data and 

guidance on determining low-and-moderate 

income thresholds

Compliance and Reporting Guidance Describes compliance and reporting 

responsibilities under the SLFRF program
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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 distributes funds directly to each eligible state, territory, metropolitan city,

county, or Tribal government. Smaller local governments that are classified as nonentitlement units 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 are not eligible to receive an award as a 

recipient under the SLFRF program; however, a state, territory, local, or Tribal 

government may transfer funds to a special-purpose unit of government to carry out a 

program or project on its behalf as a subrecipient. Special-purpose districts perform 

specific functions in the community, such as fire, water, sewer or mosquito abatement

districts. A recipient can also provide funds to an entity that is special-purpose government 

for the purpose of directly benefitting the entity as a result of the entity experiencing a 

public health impact or negative economic impact of the pandemic.

1.4. How are funds being allocated to Tribal governments, and how will Tribal

governments find out their allocation amounts?

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

Rescue Plan Act specified that $1 billion would be allocated evenly to all eligible Tribal 

governments. The remaining $19 billion was to be distributed using an allocation

methodology determined by Treasury, which was based on enrollment and employment.

There were two payments to Tribal governments. Each Tribal government’s first payment 

included (i) an amount in respect of the $1 billion allocation that was to be divided equally 

among eligible Tribal governments and (ii) each Tribal government’s pro rata share of the 

Enrollment Allocation. Tribal governments were 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.
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The second payment included a Tribal government’s pro rata share of the Employment 

Allocation. There was a $1,000,000 minimum employment allocation for Tribal

governments. In late June 2021, Tribal governments received an email notification to reenter the Treasury Submission Portal to confirm or amend their 2019 employment numbers 

that were submitted to Treasury for the CARES Act’s Coronavirus Relief Fund. To receive

an Employment Allocation, including the minimum employment allocation, Tribal 

governments must have confirmed employment numbers by July 23, 2021. Treasury

calculated employment allocations for those Tribal governments that confirmed or 

submitted amended employment numbers by the deadline. In August, Treasury 

communicated 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?

Yes. All counties that are units of general local government 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?

The American Rescue Plan Act (ARPA) 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 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 funds, must a recipient government maintain a 

declaration of emergency relating to COVID-19?

No. Neither the statute establishing the SLFRF nor the 2022 final rule requires recipients to

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

1.8. Can nonprofit or private organizations receive funds? If so, how?

Yes. Under section 602(c)(3) of the Social Security Act, a State, territory, or Tribal 
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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 2021 interim final rule clarified that the lists of transferees in 

sections 602(c)(3) and 603(c)(3) are not exclusive, and the 2022 final rule clarified that 

recipients may transfer funds to any entity to carry out, as a subrecipient, an eligible 

activity on behalf of the SLFRF recipient (transferor), as long as they comply with the 

SLFRF Award Terms and Conditions and other applicable requirements. A transferee 

receiving a transfer from a recipient under sections 602(c)(3) and 603(c)(3) will be 

considered a subrecipient and will be expected to comply with all subrecipient reporting 

requirements.

Additionally, a recipient can provide funds to an entity, including a nonprofit organization,

for the purpose of directly benefitting the entity as a result of the entity experiencing a 

public health impact or negative economic impact of the pandemic. In this instance, these 

entities will be considered beneficiaries, not subrecipients, and will not be expected to 

comply with subrecipient reporting requirements. Beneficiary reporting requirements will 

apply. 

The ARPA does not authorize Treasury to provide SLFRF funds directly to nonprofit or 

private organizations. Thus, a nonprofit or private organization should seek funds from the 

SLFRF 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. If a use of funds is not explicitly permitted in the 2022 final rule as a response to 

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

prohibited?

No. The 2022 final rule provides a non-exhaustive list of enumerated uses that respond to 

pandemic impacts. The 2022 final rule also presumes that some populations experienced 

pandemic impacts and are eligible for responsive services. Recipients also have broad 

flexibility to (1) identify and respond to other pandemic impacts and (2) serve other 

populations that experienced pandemic impacts, beyond the enumerated uses and 

presumed eligible populations. Recipients also may identify groups or “classes” of 

beneficiaries that experienced pandemic impacts and provide services to those groups. 

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

impacts of the pandemic?

Eligible uses to respond to the negative economic impacts of the pandemic include

assistance to households and communities; assistance to small businesses and nonprofits;

aid to impacted industries; and uses to support public sector capacity and workforce. For 
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an overview of the eligible uses within each of these subcategories, please see pages 12-

13 and 16-34 of the Overview of the 2022 Final Rule. The eligible uses within this 

category include programs and services to respond to impacts of the pandemic on 

households and communities, such as:

• Cash assistance

• Food assistance (e.g., child nutrition programs, including school meals) & food 

banks

• Childcare and early learning services, home visiting programs, services for child 

welfare-involved families and foster youth & childcare facilities

• Programs or services to support long-term housing security, including 

development of affordable housing and permanent supportive housing

They also include uses to bolster public sector capacity and workforce, such as:

• Payroll and covered benefits for public safety, public health, health care, human 

services and similar employees of a recipient government, for the portion of the 

employee’s time spent responding to COVID-19.

• Payroll and covered benefits for additional public sector workers up to a prepandemic baseline that is adjusted for historic underinvestment in the public 

sector, providing additional funds for employees who experienced pay cuts or 

were furloughed, avoiding layoffs, providing worker retention incentives, and 

paying for ancillary administrative costs related to hiring, support, and retention.

These tools can allow recipients not only to bring back laid-off workers, but to address 

critical shortages of teachers, instructional aides, transportation workers, behavioral 

health workers, and other key government personnel, by funding positions at competitive 

wages and improving job quality in these sectors (see FAQs #2.15, #2.16, #2.17).

Recipients also have broad flexibility to identify and respond to other pandemic impacts

and serve other populations that experienced pandemic impacts, beyond the enumerated 

uses. For more information on identifying eligible uses beyond those enumerated, please 

see pages 32-34 of the Overview of the 2022 Final Rule. 

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

are eligible?

Please see pages 12-14 of the Overview of the Final 2022 Rule for a non-exhaustive list 

of enumerated eligible uses relating to COVID-19 mitigation and prevention, as well as 

information about how to design other responses that are not included in the list.
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2.4. May recipients use funds to respond to the public health emergency and its

negative economic impacts by providing direct cash transfers to households?

Yes. Cash transfers, like all eligible uses in the public health and negative economic 

impacts category, must respond to the negative economic impacts of the pandemic on a 

household or class of households. Recipients may presume that low- and moderateincome households (as defined in the 2022 final rule), as well as households that 

experienced unemployment, food insecurity, or housing insecurity, experienced a 

negative economic impact due to the pandemic. Recipients may also identify other 

households or classes of households that experienced a negative economic impact of the 

pandemic and provide cash assistance that is reasonably proportional to, and not grossly 

in excess of, the amount needed to address the negative economic impact. For example, 

in the ARPA, Congress authorized Economic Impact Payments to households at certain 

income levels, identifying and responding to a negative economic impact of the pandemic 

on these households. 

Treasury has reiterated in the 2022 final rule that responses to negative economic impacts 

should be reasonably proportional to the impact that they are intended to address. Uses 

that bear no relation or are grossly disproportionate to the type or extent of harm 

experienced would not be eligible uses. Reasonably proportional refers to the scale of the 

response compared to the scale of the harm. It also refers to the targeting of the response 

to beneficiaries compared to the amount of harm they experienced; for example, it may 

not be reasonably proportional for a cash assistance program to provide assistance in a 

very small amount to a group that experienced severe harm and in a much larger amount 

to a group that experienced relatively little harm. Please also see questions 7-10 from the 

IRS-issued FAQ on SLFRF relating to the taxability of cash transfers.

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

negative economic impacts by replenishing unemployment funds?

Recipients may only use SLFRF funds for contributions to unemployment insurance 

trust funds and repayment of the principal amount due on advances received under Title 

XII of the Social Security Act up to an amount equal to (i) the difference between the 

balance in the recipient’s unemployment insurance trust fund as of January 27, 2020 and 

the balance of such account as of May 17, 2021, plus (ii) the principal amount 

outstanding as of May 17, 2021 on any advances received under Title XII of the Social 

Security Act between January 27, 2020 and May 17, 2021. Further, recipients may use 

SLFRF funds for the payment of any interest due on such Title XII advances. 

Additionally, a recipient that deposits SLFRF funds into its unemployment insurance 

trust fund to fully restore the pre-pandemic balance may not draw down that balance and 

deposit more SLFRF funds, back up to the pre-pandemic balance. Through December 

31, 2024, recipients that deposit SLFRF funds into an unemployment insurance trust 

fund, or use SLFRF funds to repay principal on Title XII advances, may not take action 

to reduce benefits available to unemployed workers by changing the computation 

method governing regular unemployment compensation in a way that results in a 

reduction of average weekly benefit amounts or the number of weeks of benefits 
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payable (i.e., maximum benefit entitlement).

2.6. May funds be used to reimburse recipients for costs incurred by state, local

and Tribal governments in responding to the public health emergency and its 

negative economic impacts prior to passage of the American Rescue Plan?

Use of SLFRF is generally forward looking. The 2022 final rule permits funds to be used

to cover costs incurred beginning on March 3, 2021, for the eligible use categories

described in the 2022 final rule. For the three eligible use categories of emergency relief 

from natural disasters, Surface Transportation projects, and Title I projects, recipients

may use SLFRF funds for costs incurred beginning on December 29, 2022, as provided in 

the 2023 interim final rule. 

2.7. May recipients use funds for general economic development?

Generally, no. General economic development – activities that do not respond to negative 

economic impacts of the pandemic but rather seek to more generally enhance the 

jurisdiction’s business climate – would generally not be eligible under this eligible use 

category. 

To identify an eligible use of funds under the public health and negative economic 

impacts category, a recipient must identify a beneficiary or class of beneficiaries that 

experienced a harm or impact due to the pandemic, and eligible uses of funds must be

reasonably designed to respond to the harm, benefit the beneficiaries that experienced it, 

and be related and reasonably proportional to that harm or impact. For example, job 

training and other supports – like childcare, transportation, and subsidized employment –

for unemployed workers may be used to address negative economic impacts of the public 

health emergency and be eligible.

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

industries? May recipients use funds to assist impacted industries other than

travel, tourism, and hospitality?

Please see pages 24-25 of the Overview of the 2022 Final Rule.

2.9. How does the 2022 final rule help address the disparate impacts of COVID-19 on

certain populations and geographies?

In recognition of the long-standing disparities in health and economic outcomes in 

underserved communities that have amplified and exacerbated the impacts of the COVID19 pandemic, the 2022 final rule identifies certain populations as “disproportionately 

impacted” by the pandemic and enumerates a broad range of services and programs to 

help address health disparities, to build stronger communities through investments in 

neighborhoods, to address educational disparities, to provide rental assistance vouchers or 

assistance relocating to areas of greater economic opportunity, and other eligible uses to 

respond to negative economic impacts in disproportionately impacted communities.
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Specifically, Treasury will presume that certain populations were disproportionately 

impacted by the pandemic and therefore automatically eligible to receive responsive 

services. See page 19 of the Overview of the 2022 Final Rule for a full list of the 

populations presumed disproportionately impacted by the pandemic.

Recipients may also provide responsive 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.

Treasury has provided a non-exhaustive list of eligible responses to serve 

disproportionately impacted communities on page 20 of the Overview of the Final 

Rule. Note that these are an enhanced set of responses available in addition to 

responses available to respond to impacts of the pandemic on households and 

communities (including those listed on page 18 of the Overview).

2.10. 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 2022 final rule, recipients may use SLFRF funds to respond to the

COVID-19 public health emergency, including expenses related to COVID-19 

vaccination programs.

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.

2.11. How can recipients use funds to support workers returning to work?

Under the 2022 final rule, recipients may use SLFRF funds under the public health and 

negative economic impacts eligible use category to provide assistance to individuals who 

want and are available for work, including job training, public jobs programs and fairs, 

support for childcare and transportation to and from a jobsite or interview, cash and 

other incentives for newly employed workers, subsidized employment, grants to hire 

underserved workers, assistance to unemployed individuals to start small businesses, and

development of job and workforce training centers.

2.12. 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?

As discussed in the 2022 final rule, funds may be used for payroll and covered benefits 
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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

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. Note that this category 

encompasses both public health and health care employees; both are treated as public 

health employees for the purposes of this eligible use category. 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.

2.13. May recipients use funds to establish a public jobs program?

Yes. Under the public health and negative economic impacts eligible use category, the 

2022 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.

2.14. Can funds be used for investments in affordable housing?

Yes. Under the 2022 final rule, “Development, repair, and operation of affordable housing 

and services or programs to increase long-term housing security” is an enumerated eligible 

use to respond to impacts of the pandemic on households and communities. Treasury 

continues to strongly encourage the use of SLFRF for affordable housing and has updated 

this FAQ to promote clarity and administrability in the use of these funds.

Affordable housing projects must be responsive and proportional to the harm identified. 

This standard may be met by affordable housing development projects—which may 

involve large expenditures and capital investments—if the developments increase the 

supply of long-term affordable housing for households that experienced associated 

pandemic impacts under the 2022 final rule.

Presumptively Eligible Uses

For purposes of this standard, if a project fits within either of the below presumptions, 
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Treasury will presume that a project is eligible. As discussed more below, Treasury will 

presume that the following affordable housing investments are eligible uses of SLFRF 

funds as responses to the negative economic impacts of the pandemic: (1) projects that 

would be eligible for funding under an expanded list of federal housing programs and (2) 

projects for the development, repair, or operation of affordable rental housing with certain 

income and affordability requirements. Recipients’ affordable housing projects may use 

either of these presumptions to qualify as a presumptively eligible use. If a recipient uses 

one presumption for an affordable housing project, the recipient may still use a different 

presumption for another affordable housing project.

Presumption 1: Treasury will presume that any project that is eligible to be funded under 

any of the following federal housing programs is an eligible use of SLFRF funds as a 

response to the negative economic impacts of the pandemic: 

• The National Housing Trust Fund (HTF, administered by HUD); 

• The Home Investment Partnerships Program (HOME, administered by HUD);

• The Low-Income Housing Tax Credit (administered by Treasury); 

• The Public Housing Capital Fund (administered by HUD); 

• Section 202 Supportive Housing for the Elderly Program and Section 811 

Supportive Housing for Persons with Disabilities Program (administered by 

HUD); 

• Project-Based Rental Assistance (PBRA) (administered by HUD); and

• Multifamily Preservation & Revitalization program (administered by USDA). 

In previous guidance, presumptive eligibility for affordable housing projects was limited to 

HOME and HTF. Treasury has updated this list by adding additional programs in an effort 

to increase administrability and clarity in the use of SLFRF funds for affordable housing 

purposes. This update is also expected to decrease the transaction costs associated with 

layering SLFRF funds with existing projects. Note that these programs use different 

income limits than the definitions of low- and moderate-income adopted by Treasury. 

Given the severity of the affordable housing shortage, and the ways in which the pandemic 

has exacerbated the need for affordable, high-quality dwelling units, Treasury has 

determined that the households served by these federal housing programs have been 

impacted by the pandemic and its negative economic impacts and that development of 

affordable housing consistent with these programs is a related and reasonably proportional 

response to those impacts. Additionally, affordable housing projects provided by a Tribal 

government are eligible uses of SLFRF funds if they would be eligible for funding under 

the Indian Housing Block Grant program, the Indian Community Development Block 

Grant program, or the Bureau of Indian Affairs Housing Improvement Program. 

To the extent that a recipient chooses to use SLFRF funds to invest in affordable housing 

projects in alignment with these federal housing programs, the investment agreement must 

require the covered project or units to adhere to all applicable local codes, and comply, at a 

minimum, with the applicable federal housing program’s requirements related to:

• Resident income restrictions;
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• The period of affordability and related covenant requirements for assisted units;

• Tenant protections; and

• Housing quality standards.

Presumption 2: Treasury will presume that an investment in the development, repair, or 

operation of any affordable rental housing unit is an eligible use of SLFRF funds to 

respond to the negative economic impacts of the pandemic if the unit has a limited 

maximum income of 65% area median income (AMI), as imposed through a covenant, 

land use restriction agreement, or other enforceable legal requirement for a period of at 

least 20 years. A jurisdiction may establish a longer period of affordability at its 

discretion. This presumption is available even if the project does not align with the federal 

housing programs specified in Presumption 1. 

Under this presumption, recipients may use SLFRF funds as part of the financing for a 

mixed-income housing project if the total financing made up of SLFRF funds does not 

exceed the total development costs attributable to affordable housing units limited to 

households at or below 65% AMI for the affordability period. For example, if 25% of a 

project’s units are reserved for families at or below 65% AMI for the affordability period, 

and 20% of the total development costs of the project are attributable to such reserved 

units, then SLFRF funds may be used to pay for up to 20% of the total development costs. 

The income limit and 20-year affordability covenant does not need to apply to specific 

units, but rather it may specify a number of units within the development, in which case 

the covenant should also specify the bedroom size mix. 

Using 65% AMI as the income limit aligns to the AMI component of Treasury’s definition 

of moderate-income households, which is one population that Treasury presumes impacted 

by the pandemic or its negative economic impacts. Because of the highly localized nature 

of housing costs and the broad use of AMI in affordable housing development, repair, and 

operation, Presumption 2 requires funded units to be at or below 65% AMI but does not 

incorporate the 300% FPL level that is also used to define moderate-income households 

under the 2022 final rule.

Recipients are strongly encouraged to prioritize SLFRF investments for affordable housing 

in close proximity to, or with strong transit linkages to, centers of employment and/or 

institutions that provide high quality education or childcare, health care, services and 

healthy foods.

Additional Eligible Uses

Note that other affordable housing projects, beyond those eligible under the presumptions 

described above, may also be eligible uses of SLFRF funds under the 2022 final rule if 

they are related and are reasonably proportional to addressing the negative economic 

impacts of the pandemic and otherwise meet the 2022 final rule’s requirements. As an 

example, in certain rental markets, data indicates that there are gaps in financing for units 

serving households between 50% and 80% AMI and/or significantly higher than average 

housing costs relative to AMI that have led communities in this income threshold to be 
14

impacted by the pandemic. In such cases, it may be reasonably proportional to address the 

negative economic impacts of the pandemic by funding units (e.g., up to 80% AMI) that do 

not fall into the presumptively eligible categories listed above. 

To further support sustainable and durable homeownership, recipients may consider 

offering down payment assistance, such as through contributions to a homeowner’s equity 

at origination or that establish a post-closing mortgage reserve account on behalf of the 

borrower that may be utilized to make a missed or partial mortgage payment at any point 

during the life of the loan (e.g., if the borrower faces financial stress). Homeownership 

assistance that would be eligible under the Community Development Block Grant (at 24 

CFR 507.201(n)) is also an eligible use of SLFRF funds.

2.15. Can I use funds to raise public sector wages and hire public sector workers?

Yes. Under the increased flexibility of the 2022 final rule, SLFRF funding may be used to 

support a broader set of uses to restore and support public sector employment. Eligible 

uses include hiring up to a pre-pandemic baseline that is adjusted for historic 

underinvestment in the public sector, providing additional funds for employees who 

experienced pay cuts or were furloughed, avoiding layoffs, providing worker retention 

incentives, including reasonable increases in compensation, and paying for ancillary 

administrative costs related to hiring, support, and retention. 

Under the set of eligible uses for public-sector rehiring, recipients may fill vacancies and 

add additional employees using SLFRF funds (see pages 4385-4387 of the 2022 final rule 

and pages 27-28 of the Overview of the 2022 Final Rule). Recipients have two options to 

restore pre-pandemic employment, depending on the recipient’s needs. First, if the 

recipient simply wants to hire back employees for pre-pandemic positions, recipients may 

use SLFRF funds to hire employees for the same positions that existed on January 27, 

2020, but that were unfilled or eliminated as of March 3, 2021. Recipients may use SLFRF 

funds to cover payroll and covered benefits for such positions through the period of 

performance. 

Second, if the recipient wants to hire above the pre-pandemic baseline and/or would like to 

have flexibility in positions, recipients may use SLFRF funds to pay for payroll and 

covered benefits associated with the recipient increasing its number of budgeted FTEs up 

to 7.5 percent above its pre-pandemic baseline. Filling these roles may require recipients to 

increase wages and improve benefits above and beyond what they currently offer, 

especially in roles with historically low wages and acute staffing needs. This compensation 

would be an eligible use of SLFRF funds.

SLFRF funds also may be used to provide worker retention incentives, including 

reasonable increases in compensation to persuade employees to remain with the employer 

as compared to other employment options. Retention incentives must be entirely additive 

to an employee’s regular compensation, narrowly tailored to need, and should not exceed 

incentives traditionally offered by the recipient or compensation that alternative employers 

may offer to compete for the employees. Treasury presumes that retention incentives that 
15

are less than 25 percent of the rate of base pay for an individual employee or 10 percent for 

a group or category of employees are reasonably proportional to the need to retain 

employees, as long as other requirements are met.

2.16. How can funds be used to improve job quality and address labor supply 

challenges in the education and childcare sectors?

SLFRF funds can pay for the full salary and benefits of many school and childcare staff, 

including increased wages needed to recruit and retain excellent staff, and to fund premium 

pay, bonuses, training, and other worker supports. Some examples of potential uses of 

funds related to supporting the education and childcare sectors are provided below:

• Under the public health and negative economic impacts eligible use category, 

SLFRF funds can be used broadly for re-hiring public sector staff, such as school 

staff, to restore the public sector, including payroll and covered benefits for new 

or re-hired public employees (see FAQ #2.15).

o Even where the recipient, such as the municipality, does not have 

budgetary authority over a school district, it may choose to sub-award 

SLFRF funds to districts and other government entities for these purposes 

(see FAQ #2.17).

• SLFRF can fund premium pay for essential workers, including school personnel 

and childcare providers working in person in both the public and private sector, to 

compensate them for their service during the pandemic (see pages 35-36 of the 

Overview of the 2022 Final Rule and section 5 of the FAQs).

• Under the public health and negative economic impacts eligible use category,

SLFRF can fund supports for unemployed and underemployed workers, including 

hiring bonuses, training, and other labor supports, regardless of sector (see FAQ 

#2.11).

o Under this provision, recipients can help childcare providers and school 

districts by strengthening pipelines into these sectors, including by using 

SLFRF funds to train potential workers to fill in-demand roles in childcare 

and education, including as school bus drivers, school nutrition staff, 

paraprofessionals, and other staff. 

• Childcare subsidies and other supports for childcare programs – public or private 

– that serve low- and moderate-income families, are broadly eligible uses of 

SLFRF funding under the public health and negative economic impacts eligible 

use category (see FAQ #2.25). These subsidies can support improvements to 

wages and job quality that make childcare employment an attractive career.

• Recipients can also provide assistance to small businesses under the public health 
16

and negative economic impacts eligible use category – which many state and local 

governments can use to help childcare small businesses expand their business, 

raise wages for workers, and complete training and other technical assistance to 

support high-quality care, given the impacts these businesses have faced over the 

course of the pandemic (see pages 21-22 of the Overview of the 2022 Final Rule). 

2.17. How can recipients use funds to invest in their public sector workforce when the 

recipient government is not the direct employer, as is the case with some transit 

agencies and local educational agencies?

Under the increased flexibility of the 2022 final rule, SLFRF funds may be used to support 

a broader set of uses to restore and support public sector employment as a response to the 

pandemic and its negative economic impacts (see FAQ #2.15).

Treasury acknowledges that funding models for public sector workers vary drastically 

across jurisdictions, and the direct employer of a public sector worker may be an entity 

separate from the SLFRF recipient government, like an independent transit agency or local 

educational agency (LEA), rather than the recipient government itself. Recipients may still 

use SLFRF funds to hire workers in these sectors under such circumstances. 

Using the calculation detailed on page 4386 of the 2022 final rule and pages 27-28 of the 

Overview of the 2022 Final Rule, a recipient may calculate at an entity level the actual 

number of FTEs for the entity and the adjusted pre-pandemic baseline for the entity. The 

difference between the actual number of FTEs and the adjusted pre-pandemic baseline 

represents the number of FTEs that can be hired using SLFRF funds. 

A recipient may then transfer funds to the entity, which would act as a subrecipient and 

cover payroll, covered benefits, and other costs associated with hiring up to this number 

of FTEs. A recipient may, in addition, “transfer” the FTEs it may hire based on its own 

calculation to the entity. A recipient may not, however, perform the calculation on the 

behalf of an entity, and then “transfer” to itself, or to any other entity, any of the FTEs 

able to be hired by the entity.

As an illustrative example, consider a recipient county government that would like to 

fund the salary and benefits costs for hiring teachers in a school district. 

The school district has 2000 budgeted FTEs on January 27, 2020. The school district’s 

pre-pandemic baseline is 2000 FTEs; its adjusted pre-pandemic baseline is 2000 * 1.075 

= 2150 FTEs. The county’s pre-pandemic baseline is 1000 FTEs; its adjusted prepandemic baseline is 1000 * 1.075 = 1075 FTEs. Now, assume that on March 3, 2021, the 

school district had 1800 budgeted FTEs in total, and the county had 1000 budgeted FTEs. 

The county would be able to transfer funds to the school district to hire up to 350 FTEs 

with SLFRF funds (that is, 2150 - 1800 = 350 FTEs), and additionally, “transfer” up to 75 

FTEs to the school district (that is, 1075 - 1000 = 75 FTEs). If the county decided to 

“transfer” all of its 75 FTEs to the school district, then the school district could hire up to 

350 + 75 = 425 FTEs using funds from the county. However, the county may not directly 
17

hire any more than 75 FTEs under this public sector hiring provision, and may not use 

any of the funds for the 350 FTEs able to be hired by the school district to fund any of the 

county’s FTE positions.

This public sector rehiring provision is a powerful tool for addressing staffing needs and 

shortages across government. 

2.18. Can I use SLFRF funds to provide childcare to households?

Yes. Childcare and early learning services, home visiting programs, services for child 

welfare involved families and foster youth are an enumerated use eligible to respond to 

impacts of the pandemic on households and communities. These eligible uses can include 

new or expanded services, increasing access to services, efforts to bolster, support, or 

preserve existing providers and services, and similar activities. Further, improvements to 

or new construction of childcare, daycare, and early learning facilities are eligible capital 

expenditures, subject to the other eligibility standards for capital expenditures.

2.19. How can funds be used for “installation and improvement of ventilation systems 

in congregate settings, health care settings, or other public facilities” like commercial 

buildings, office buildings, schools, nursing homes, multi-family residential buildings, 

and restaurants?

As a general matter, ventilation improvements, including updates to HVAC systems, 

improved air filtration, and increased outdoor air flow, can help reduce the concentration 

and risk of exposure to aerosols, and thus infection with COVID-19.1 The National 

COVID-19 Preparedness Plan specifies that improving ventilation and air filtration is a key 

component of keeping schools and businesses safely open. Although improvements to 

ventilation and air cleaning cannot on their own eliminate the risk of airborne transmission 

of the SARS-CoV-2 virus, the Environmental Protection Agency (EPA) has recommended 

taking steps to improve indoor air quality (IAQ ) including optimizing fresh air ventilation, 

enhancing air filtration and cleaning, and managing the way air flows as components of a 

larger approach that may include individual actions and layered prevention strategies.

Under the SLFRF program, funds for installation and improvement of ventilation systems 

can be used for projects that respond to the pandemic’s public health impacts and provide 

longer-term benefits, including the inspection, testing, commissioning, maintenance, 

repair, replacement, and upgrading of HVAC systems to improve indoor air quality in 

facilities. Projects can include assessing current HVAC systems, updating HVAC systems, 

updating air filters, installing functional windows for improved ventilation, repairing 

windows and doors, installing in-room air cleaning devices, and other projects for 

improving indoor air quality. For a more extensive guide of how to effectively use funds 

for ventilation improvements, Treasury recommends reviewing EPA’s Clean Air in 

Buildings Challenge, a call to action and a set of guiding principles and best practices to 

assist building owners and operators with improving IAQ in buildings, as well as EPA’s 

1 https://www.cdc.gov/coronavirus/2019-ncov/community/ventilation.html; 

https://www.epa.gov/coronavirus/indoor-air-and-coronavirus-covid-19. 
18

resource page on “Ventilation and Coronavirus (COVID-19).” For a guide on federal 

programs and resources to support school infrastructure, including ventilation 

improvements, Treasury recommends consulting the “White House Toolkit: Federal 

Resources for Addressing School Infrastructure Needs.” Further, Treasury recommends 

that recipients engage with public health and infection prevention professionals to develop 

and support an effective COVID-19 mitigation strategy. Finally, Treasury recommends 

that recipients ensure that the inspection, testing, commissioning, maintenance, repair, 

replacement, and upgrading of ventilation systems is performed by a skilled, trained, and 

certified workforce. 

Recipients that undertake ventilation system investments under the public health and 

negative economic impacts eligible use category should review capital expenditure 

requirements in the 2022 final rule and note that capital expenditures must be related and 

reasonably proportional to the pandemic impact identified.

2.20. In what types of buildings can recipients use funds to install and improve of 

ventilation systems?

In addition to directly installing and improving ventilation systems in congregate settings, 

health care settings, or other public facilities, recipients may grant or loan funds to 

businesses, non-profits, and other entities that may benefit from COVID-19 mitigation 

measures. 

In making these investments, Treasury recommends that recipients consult with public 

health and infection prevention professionals and that recipients ensure work is performed 

by a workforce that is skilled, trained, and certified in ventilation systems work. Many 

buildings would benefit from ventilation improvements, including settings where risk of 

infection is higher, such as when people are indoors for prolonged periods of time, are in 

crowded environments, or are performing activities that increase emission of respiratory 

fluids (such as speaking loudly, singing, or exercising).2 This includes commercial 

buildings, office buildings, dense worksites, schools, nursing homes and other long-term 

care facilities, multi-family residential buildings, restaurants, correctional facilities, 

transportation hubs, and public transit vehicles, among other locations. Recipients are 

encouraged to consider congregate settings and other key locations as priorities for 

installation and improvement of ventilation systems. Please note that use of funds is not 

limited to government-owned public facilities and funds may be distributed by recipients 

to private businesses, non-profits, and others for COVID-19 mitigation and prevention, as 

the 2022 final rule clarifies that recipients may identify the general public as the impacted 

population for COVID-19 prevention and mitigation services. Recipients should review 

capital expenditure requirements for the public health and negative economic impacts 

eligible use category in the 2022 final rule before undertaking investments in ventilation 

systems.

For more information on ventilation system upgrades for school settings, Treasury 

2 https://www.epa.gov/coronavirus/indoor-air-and-coronavirus-covid-19. 
19

recommends consulting:

• Creating Healthy Indoor Air Quality in Schools: https://www.epa.gov/iaq-schools

• Efficient and Healthy Schools campaign: https://efficienthealthyschools.lbl.gov/

• Efficient and Healthy Schools website: 

https://www.energy.gov/eere/buildings/efficient-and-healthy-schools

For more information on ventilation system upgrades for office and other commercial 

building settings, Treasury recommends consulting: 

• Enhancing Health with Indoor Air: https://sftool.gov/learn/about/626/enhancinghealth-indoor-air

• Sustainable Response to COVID-19: 

https://sftool.gov/learn/about/625/sustainable-response-covid-19

• Better Buildings Resource Center: Building Operations during COVID-19 

https://betterbuildingssolutioncenter.energy.gov/covid19

For more information on ventilation system upgrades for residential settings, Treasury 

recommends consulting: 

• Improving Ventilation in Your Home: https://www.cdc.gov/coronavirus/2019-

ncov/prevent-getting-sick/Improving-Ventilation-Home.html

• Ventilation in Buildings: https://www.cdc.gov/coronavirus/2019-

ncov/community/ventilation.html

2.21. Can SLFRF funds be used to support public school facility improvements, 

upgrades, and new construction – such as those that make buildings more energy 

efficient, increase their use of renewable energy, address capacity constraints, and 

respond to health and safety concerns?

Yes. There are numerous ways in which SLFRF funds may be used to support public 

school facility improvements and upgrades.

First, as part of the public health and negative economic impacts (PH-NEI) eligible use 

category, SLFRF funds may be used address educational disparities in disproportionately 

impacted communities,3 which may include funding improvements or new construction of 

schools and other educational facilities or equipment. Recipients may consider energy 

efficiency improvements as part of their facility investments, and may also use funds for 

pre-project development costs, such as assessment of building conditions, energy audits, 

feasibility studies, HVAC commissioning and testing, and lead testing, that are tied to or 

reasonably expected to lead to an eligible investment in school facilities to address 

educational disparities in disproportionately impacted communities. Recipients should 

review and comply with the requirements applicable to capital expenditures under the PH3 Please see FAQ 2.9 for more on disproportionately impacted communities, and the Overview of the 2022 Final 

Rule (p. 19) for a list of presumed disproportionately impacted communities. For services to address educational 

disparities, Treasury will recognize Title I eligible schools as disproportionately impacted and responsive services 

that support the school generally or support the whole school as eligible.
20

NEI eligible use category as outlined in the 2022 final rule.4 

Second, as part of the PH-NEI eligible use category, recipients may use funds for 

adaptations to schools for the purpose of mitigating the spread of COVID-19, including for 

ventilation improvements. Similar to the above, recipients should ensure compliance with 

the capital expenditure requirements for the eligible use category.

Third, as part of the water and sewer infrastructure eligible use category, recipients may 

invest in certain projects to support lead remediation, including replacement of internal 

plumbing and faucets and fixtures in schools and childcare facilities. Recipients can also 

invest in certain green water infrastructure projects. Eligible water and sewer projects are 

generally aligned with those allowable under the EPA’s Drinking Water and Clean Water 

State Revolving Funds, and Treasury has added additional eligible projects as part of the 

2022 final rule. Recipients should review and comply with the specific requirements 

provided for in the water and sewer infrastructure eligible use category as outlined in the 

2022 final rule.

Fourth, as part of the revenue loss eligible use category, which is the broadest eligible use 

category that is capped by either the $10 million standard allowance (up to a recipient’s 

award size) or a recipient’s calculated revenue loss, recipients may use SLFRF funds on 

government services. These government services include any service traditionally provided 

by a government unless Treasury has stated otherwise. Eligible government services that 

may be covered under the revenue loss eligible use category include maintenance, 

improvement, or new construction of public school facilities, including those that address 

over-crowding and capacity constraints, support energy efficiency, and respond to health 

and safety concerns, among other purposes.

Under the SLFRF program, recipients must obligate all award funds by December 31, 

2024, and expend funds by December 31, 2026, with the exception of projects within the 

Surface Transportation projects and Title I projects eligible use categories for which 

recipients must expend funds by September 30, 2026. Recipients may transfer funds to 

other entities, including local educational agencies, to carry out as subrecipients an eligible 

use of funds as long as the subrecipients comply with SLFRF program requirements.

Recipients should note that the Davis-Bacon Act requirements (prevailing wage rates) do 

not apply to projects funded solely with award funds from the SLFRF program, except for 

recipients using funds for Surface Transportation projects and non-Tribal recipients using 

funds for Title I projects and certain SLFRF-funded construction projects undertaken by 

the District of Columbia. Requirements under the National Environmental Policy Act, as 

amended (NEPA), do not apply to Treasury’s administration of the SLFRF program, with 

the exception of Surface Transportation projects and Title I projects as described in FAQ 

#16.16. However, projects supported with SLFRF funds may still be subject to NEPA 

requirements if they are also funded by other federal financial assistance programs. 

2.22. Would investments in improving outdoor spaces (e.g., parks) be an eligible 

4 Please see the Overview of the 2022 Final Rule (p. 30-31) for a summary of capital expenditure requirements for 

the public health and negative economic impacts eligible use category.
21

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

economic impacts?

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 2022 final rule includes enumerated eligible uses in 

disproportionately impacted communities for developing neighborhood features that 

promote improved health and safety outcomes, such as parks, green spaces, recreational 

facilities, sidewalks, pedestrian safety features like crosswalks, projects that increase 

access to healthy foods, streetlights, neighborhood cleanup, and other projects to 

revitalize public spaces. 

Second, recipients may provide assistance to disproportionately impacted small

businesses. The 2022 final rule included rehabilitation of commercial properties, 

storefront improvements, and façade improvements as enumerated eligible assistance to 

these small businesses. 

Third, recipients can assist small businesses, nonprofits, or other entities to create or 

enhance outdoor spaces to mitigate the spread of COVID-19 (e.g., restaurant patios).

Recipients pursuing many of these uses should also note the eligibility standards for capital 

expenditures in the 2022 final rule, which are summarized on pages 30-31 of the Overview 

of the 2022 Final Rule.

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

eligibleuse of funds as a response to the public health emergency?

Yes. The 2022 final rule maintains that SLFRF funds may be used to address 

administrative needs of recipient governments that were caused or exacerbated by the 

pandemic. Please see pages 4388-4389 of the 2022 final rule. 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 the 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. 

2.24. Can funds be used for eviction prevention efforts or housing stability

services? 

Yes. Treasury provided a non-exhaustive list of eligible services in the 2022 final rule: 

Rent, rental arrears, utility costs or arrears (e.g., electricity, gas, water and sewer, trash 
22

removal, and energy costs, such as fuel oil), reasonable accrued late fees (if not included 

in rental or utility arrears), mortgage payment assistance, financial assistance to allow a 

homeowner to reinstate a mortgage or to pay other housing-related costs related to a 

period of forbearance, delinquency, or default, mortgage principal reduction, facilitating 

mortgage interest rate reductions, counseling to prevent foreclosure or displacement, 

relocation expenses following eviction or foreclosure (e.g., rental security deposits, 

application or screening fees). 

Treasury also clarified that assistance to households for delinquent property taxes, for 

example to prevent tax foreclosures on homes, was permissible under the 2021 interim 

final rule and continues to be so under the 2022 final rule. In addition, Treasury also 

clarified that recipients may administer utility assistance or address arrears on behalf of 

households through direct or bulk payments to utility providers to facilitate utility 

assistance to multiple consumers at once, so long as the payments offset customer 

balances and therefore provide assistance to households. The public health and negative 

economic impacts eligible use category also includes emergency assistance for 

individuals experiencing homelessness, either individual-level assistance (e.g., rapid 

rehousing services) or assistance for groups of individuals (e.g., master leases of hotels, 

motels, or similar facilities to expand available shelter). Please see page 4360 of the 2022 

final rule for further relevant clarifications. 

3. Eligible Uses – Revenue Loss

3.1. Does a recipient need to calculate or provide proof of its revenue loss to use 

SLFRF funds for government services? 

The 2022 final rule allowed recipients the option to claim up to $10 million of their SLFRF 

allocation, which Treasury termed the “standard allowance,” to replace lost revenue and 

use that funding to provide government services in lieu of calculating revenue loss. The 

formula for calculating revenue loss is set out in the 2022 final rule. Recipients may elect a 

“standard allowance” of up to $10 million to spend on government services through the 

period of performance. The standard allowance is available to all recipients and offers a 

simple, convenient way to determine revenue loss, instead of using the full formula 

specified in the 2022 final rule. The 2023 CAA codified the option for recipients to claim

up to $10 million in revenue loss funds. 

Treasury had previously provided that recipients must make a one-time, irrevocable 

election to either take the standard allowance or calculate revenue loss. Recipients were 

able to indicate this choice in their Project and Expenditure Reports due April 30, 2022, 

and recipients may update their revenue loss election, as appropriate, in future reporting 

cycles through the April 2023 reporting period. Upon update, any prior revenue loss 

election will be superseded.

In response to the codification of the standard allowance in the 2023 CAA, recipients need 

not make any changes to their current revenue loss determination and may continue with 

their previous determination if they so choose. Recipients that would like to update their 
23

revenue loss determination will be able to update their revenue loss determination, as 

appropriate, through the April 2025 reporting period. Upon update, any prior revenue loss 

election will be superseded. For example, if a recipient previously elected to calculate 

revenue loss in their Project and Expenditure Report due April 30, 2022, and would like to 

update their election, Treasury’s reporting portal will allow the recipient to supersede their 

prior election in future reporting cycles and instead take the standard allowance. Similarly, 

recipients that previously elected the standard allowance and would like to supersede their 

prior election and instead calculate revenue loss may update their revenue loss election in 

future reporting cycles. 

Recipients continue to be required to employ a consistent methodology across the period of 

performance (i.e., choose to use either the standard allowance or the full formula) and may 

not elect one approach for certain reporting years and the other approach for different 

reporting years. Recipients that elect the standard allowance do not have to produce any 

further demonstration or calculation of revenue loss.

Electing the standard allowance does not increase or decrease a recipient’s total allocation.

For example, a recipient with a SLFRF allocation of $6 million would be allowed to claim 

no more than $6 million as revenue loss to use for government services, and a recipient 

with an allocation of $12 million would be allowed to claim up to $10 million as the 

standard allowance and use the remaining $2 million toward other eligible use categories

in the SLFRF program. Recipients that elect to calculate revenue loss by formula must do 

so as articulated in the 2022 final rule and described in the Overview of the 2022 Final 

Rule and FAQ #3.6.

3.2. Can revenue loss funds be used for a purpose that is not explicitly listed as an 

example of a government service in the Overview of the 2022 Final Rule or 2022 Final 

Rule? 

Yes. Government services generally include any service traditionally provided by a 

government, unless Treasury has stated otherwise. Common examples are listed on page 

11 of the Overview of the 2022 Final Rule and page 4408 of the 2022 final rule, but these 

lists are not exhaustive. In addition to the common examples described in the 2022 final 

rule, many recipients and stakeholders have asked if using funds for activities like payroll 

for specific public sector staff, renovations to particular government facilities, and 

equipment to facilitate and improve government services such as health services, waste 

disposal, road building and maintenance, and water and sewer services would be eligible as 

government services. Treasury is clarifying here that under the 2022 final rule, payroll for 

government employees, contracts, grants, supplies and equipment, rent, and the many other 

costs that governments typically bear to provide services are costs that could comprise the 

costs of government services, and are eligible uses of funds. 

Revenue loss is the most flexible eligible use category under the SLFRF program, and 

funds are subject to streamlined reporting and compliance requirements. Recipients should 

be mindful that certain restrictions, which are detailed in the Restrictions on Use section in 

the Overview of the 2022 Final Rule and 2022 final rule and apply to all eligible use
24

categories, apply to government services as well. Note also that every use that is eligible 

under other eligible use categories is also eligible under revenue loss, because those 

eligible uses are also services provided by recipient governments, and Treasury encourages 

recipients to use their funds for investments that serve the needs of their communities and

build a stronger and more equitable recovery.

3.3. Can revenue loss funds be used for a project eligible under other eligible use 

categories, such as addressing the public health and negative economic impacts of the 

pandemic, providing premium pay, investing in water, sewer, or broadband 

infrastructure, providing emergency relief for natural disasters, funding projects 

eligible under certain Department of Transportation programs (Surface 

Transportation projects), or funding projects eligible under Title I of the Housing 

and Community Development Act of 1974 (Title I projects)?

Yes. The revenue loss eligible use category allows recipients to expend funds with 

flexibility and streamlined reporting requirements, including on expenditures that would 

not be eligible under other eligible use categories. In addition, recipients may use revenue 

loss funds to carry out investments that would be eligible under other eligible use 

categories, because those eligible uses are also services provided by recipient governments.

Treasury encourages the use of government services funds on uses enumerated in these 

categories, including but not limited to affordable housing, childcare investments, 

supporting public sector workers, job training and workforce development, and

investments in public health.

3.4. How is revenue defined for the purpose of the revenue loss calculation formula?

The 2022 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.

General Revenue means money that is received from tax revenue, current charges, and 

miscellaneous general revenue, excluding refunds and other correcting transactions and 

proceeds from issuance of debt or the sale of investments, agency or private trust 

transactions, and intergovernmental transfers from the Federal Government, including 

transfers made pursuant to section 9901 of the American Rescue Plan Act. General 

Revenue also includes revenue from liquor stores that are owned and operated by state and 

local governments. General Revenue does not include revenues from utilities, except 

recipients may choose to include revenue from utilities that are part of their own 

government as General Revenue provided the recipient does so consistently over the 

remainder of the period of performance. Revenue from Tribal business enterprises must be 

included in General Revenue. 

Please see the appendix for a diagram of the 2022 final rule’s definition of General

Revenue within the Census Bureau’s revenue classification structure.

3.5. Will revenue be calculated on an entity-wide basis or on a source-by-source basis 
25

(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 aggregate revenue by purpose rather than by source.

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.”

Please refer to the appendix for further details on the definition of General Revenue. 

3.6. For recipients not electing the $10 million standard allowance, what is the

formula for calculating the reduction in revenue?

Recipients calculate revenue loss at four distinct points in time, either at the end of each 

calendar year (e.g., December 31 for years 2020, 2021, 2022, and 2023) or the end of each 

fiscal year of the recipient. Under the flexibility provided in the 2022 final rule, recipients 

can choose whether to use calendar or fiscal year dates but must be consistent throughout 

the period of performance. To calculate revenue loss at each of these dates, recipients must 

follow a four-step process:

a. Calculate revenues collected in the most recent full fiscal year prior to the public health

emergency (i.e., last full fiscal year before January 27, 2020), called the base year

revenue.

b. Estimate counterfactual revenue, which is equal to the following formula, where n is 

the number of months elapsed since the end of the base year to the calculation date:

base year revenue × (1 + growth adjustment) n/12

The growth adjustment is the greater of either a standard growth rate—5.2 percent—or

the recipient’s average annual revenue growth in the last full three fiscal years prior to the 

COVID-19 public health emergency.

c. Identify actual general revenue, which equals revenues collected over the twelve 

months immediately preceding the calculation date. Under the 2022 final rule, recipients 
26

must adjust actual revenue totals for the effect of tax cuts and tax increases that are 

adopted after the date of adoption of the 2022 final rule (January 6, 2022). Specifically, 

the estimated fiscal impact of tax cuts and tax increases adopted after January 6, 2022, 

must be added to or subtracted from the calculation of actual revenue for purposes of 

calculation dates that occur on or after April 1, 2022. Recipients may subtract from their 

calculation of actual revenue the effect of tax increases enacted prior to the adoption of 

the 2022 final rule. Note that recipients that elect to remove the effect of tax increases 

enacted before the adoption of the 2022 final rule must also remove the effect of tax 

decreases enacted before the adoption of the 2022 final rule, such that they are accurately 

removing the effect of tax policy changes on revenue.

d. Revenue loss for the calculation date is equal to counterfactual revenue minus actual

revenue (adjusted for tax changes) for the twelve-month period. If actual revenue exceeds 

counterfactual revenue, the loss is set to zero for that twelve-month period. Revenue loss 

for the period of performance is the sum of the revenue loss for each calculation date.

The supplementary information in the 2022 final rule provides an example of this 

calculation, which recipients may find helpful, in the Revenue Loss section. Recipients 

should see the 2022 final rule for the full description of the requirements to reflect the 

effect of tax cuts and tax increases on actual revenue. 

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

the COVID-19 public health emergency?

Under the 2022 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, 

in the case of both the standard allowance and the formula, which, as discussed above 

adjusts for certain tax policy changes.

3.8. 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.

3.9. In calculating revenue loss, are recipients required to use audited financials?

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

Treasury expects all information submitted to be complete and accurate. 

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

data?
27

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.

3.11. Should recipients calculate revenue loss on a cash basis or an accrual basis?

Recipients may calculate revenue loss on a cash, accrual, or modified accrual basis,

provided that recipients are consistent in their choice of methodology for all inputs of 

the revenue loss calculation throughout the period of performance and until reporting is

no longer required.

3.12. 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?

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.

3.13. What entities constitute a government for the purpose of calculating revenue

loss?

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

of measuring a recipient’s General 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. Recipients may not include independent entities in calculating General 

Revenue. 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.
28

• 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 forpublic 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 include the portion of General Revenue that

corresponds to the entity.

To further assist recipients in applying the foregoing 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 judgment. 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 2022 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 #3.4 and the Appendix for

the components included in General Revenue.

3.14. How should recipients that receive multiple allocations (e.g., a city and a county 

consolidated government) calculate their revenue loss?

If a government entity receives a combined award (e.g., in its capacity both as an NEU and 

as a Unit of General Local Government (UGLG) within a non-UGLG county), it must 

determine its revenue loss only once as the combined entity. The government entity may 

not, for example, elect the standard allowance once as an NEU and once as an UGLG (i.e., 

it would only be able to claim up to a total of $10 million standard allowance against all of 
29

its awards). Similarly, if the government entity elects to calculate its revenue according to 

the formula set out in the 2022 final rule, it must do so on a combined basis. 

In the case of an award to an UGLG within a non-UGLG county under section 

603(b)(3)(B)(ii) of the Social Security Act, the UGLG is considered the prime recipient of 

this award. Therefore, the prime recipient in this circumstance may treat these transferred 

funds as its own award for purposes of the revenue loss determination.

For example, if an NEU receives $2 million in its NEU distribution, and then receives an 

additional $13 million as an UGLG within a non-UGLG county, and the NEU elects the 

standard allowance of $10 million in revenue loss, the NEU would be able to spend up to a 

total of $10 million on government services under revenue loss against its awards, and 

would be able to spend the remaining $5 million in other expenditure categories.

4. Eligible Uses – General

4.1. How do I know if a specific use is eligible?

The best way to begin evaluation of whether a specific use is an eligible use of SLFRF 

funds is to consider which of the seven eligible use categories the use may fall into.

As a reminder, there are seven eligible use categories, listed below from the broadest and 

most flexible to the most specific. The Overview of the 2022 Final Rule serves as a 

summary of the major provisions of the four categories authorized in the American Rescue 

Plan. The Overview of the 2023 Interim Final Rule summarizes the major provisions of the 

three new categories of eligible uses authorized by the 2023 CAA.

• Replace lost public sector revenue, using SLFRF funds to provide government 

services up to the amount of revenue loss due to the pandemic. (pages 9-11 of the 

Overview of the 2022 Final Rule)

• Support the COVID-19 public health and economic response by addressing 

COVID-19 and its impact on public health as well as addressing economic harms 

to households, small businesses, nonprofits, impacted industries, and the public 

sector. (pages 12-34 of the Overview of the 2022 Final Rule) 

• Provide premium pay for eligible workers performing essential work, offering 

additional support to those who have and will bear the greatest health risks 

because of their service in critical sectors. (pages 35-36 of the Overview of the 

2022 Final Rule)

• Invest in water, sewer, and broadband infrastructure, making necessary 

investments to improve access to clean drinking water, support vital wastewater 

and stormwater infrastructure, and expand affordable access to broadband 

internet. (pages 37-40 of the Overview of the 2022 Final Rule)
30

• Provide emergency relief from natural disasters or their negative economic 

impacts. (pages 4-8 of the Overview of the 2023 Interim Final Rule)

• Fund eligible Surface Transportation projects. (pages 9-15 of the Overview of the 

2023 Interim Final Rule)

• Fund Title I projects that are eligible activities under the Community 

Development Block Grant and Indian Community Development Block Grant 

programs. (pages 9, 16-19 of the Overview of the 2023 Interim Final Rule). 

The SLFRF program provides substantial flexibility for each jurisdiction to meet local 

needs within these eligible use categories. In general, recipients should think about what 

services they aim to provide, and for which groups or populations, and assess whether this 

use of SLFRF funds would fit within the parameters of the eligible use category as 

described in the 2022 final rule, the 2023 interim final rule, and their respective overviews. 

Recipients also should be mindful that various forms of assistance have been made 

available during the pandemic (e.g., Economic Injury Disaster Loans through the U.S. 

Small Business Administration), and certain restrictions on duplications of benefits may 

apply.

Revenue loss eligible use category

If a use does not appear to be eligible under the water, sewer, and broadband infrastructure, 

premium pay, public health emergency or its, negative economic impacts, emergency relief 

from natural disasters, Surface Transportation projects, and Title I projects eligible use 

categories, recipients should consider using funds under the revenue loss eligible use 

category. This category provides recipients broad latitude to use funds for the provision of 

government services to the extent of a reduction in revenue due to the pandemic. 

All recipients may (1) elect a “standard allowance” of up to $10 million to spend on 

government services through the period of performance (see FAQ #3.1), or (2) elect to 

calculate their revenue loss using the formula provided in the 2022 final rule. Under the 

revenue loss eligible use category, government services generally include any service 

traditionally provided by a government, unless Treasury has stated otherwise (see FAQ 

#3.2). For additional information and a list of examples of common government services,

recipients can refer to page 11 of the Overview of the 2022 Final Rule and page 4408 of 

the 2022 final rule. The lists in these materials are not exhaustive and every use that is 

eligible under other eligible use categories is also eligible under the revenue loss category. 

Public health and negative economic impacts eligible use category

To assess the eligibility of a use under the public health and negative economic impacts 

eligible use category, recipients may refer initially to the non-exhaustive lists of 

enumerated uses that respond to pandemic impacts, and the lists of populations presumed 

to have experienced pandemic impacts and be eligible for responsive services. These lists 

appear in the Overview of the 2022 Final Rule and the 2022 final rule organized by sub-
31

categories around the types of assistance a recipient may provide. Recipients should first 

determine the sub-category where their use of funds may fit (e.g., public health, assistance 

to households, assistance to small businesses), based on the entity that experienced the 

health or economic impact. Recipients then should refer to the relevant section for more 

details on each sub-category of eligible responses.

If a recipient intends to provide enumerated uses of funds to populations presumed 

eligible, then the use of funds is clearly consistent with the 2022 final rule. However, if 

the intended expenditure does not match an enumerated use serving a presumed eligible 

population, that does not necessarily mean it is ineligible. Recipients may consider using 

the broad flexibility available in this eligible use category, beyond the enumerated uses and 

presumed eligible populations, to (1) identify and respond to other pandemic impacts and 

(2) serve other populations that experienced pandemic impacts. Recipients may also 

identify groups or “classes” of beneficiaries that experienced pandemic impacts and 

provide services to those groups.

Premium pay eligible use category

To assess whether a use falls under the premium pay eligible use category, recipients can 

follow the steps outlined on pp. 35-36 of the Overview of the 2022 Final Rule and refer to 

the FAQs in section 5.

Water, sewer, and broadband infrastructure eligible use category

To assess whether a use falls under the water, sewer, and broadband infrastructure 

category, recipients can consult pp. 37-40 of the Overview of the 2022 Final Rule and refer 

to the FAQs in section 6.

Emergency Relief from Natural Disasters

To assess whether a use falls under the emergency relief from natural disasters category, 

recipients should first identify a natural disaster that has occurred or is expected to occur 

imminently, or a natural disaster that is anticipated to occur in the future.

Second, recipients should identify emergency relief that responds to the physical or 

negative economic impacts, or potential physical or negative economic impacts, of the

natural disaster. The emergency relief must be related and reasonably proportional to the 

impact identified. A non-exhaustive list of eligible emergency relief can be found on pages 

5-6 in the Overview of the 2023 Interim Final Rule. For more information, recipients can 

consult pages 4-8 of the Overview of the 2023 Interim Final Rule and refer to the FAQs in 

section 15.

Surface Transportation projects

To assess whether a use falls under the Surface Transportation projects eligible use 

category, recipients should examine the project to determine whether it falls under 
32

Pathway One, Pathway, Two, or Pathway Three, and whether the project meets the 

statutory requirements that apply to this eligible use category. 

For more information, see pages 9-15 of the Overview of the 2023 Interim Final Rule and 

the FAQs in section 16.

Title I projects

To assess whether a use falls under the Title I projects eligible use category, recipients 

should assess whether the project is aligned with the eligible activities permitted under the 

CDBG and ICDBG programs, activities listed under section 105(a) of the Housing and 

Development Act of 1974 (HCDA) (42 U.S.C. 5305(a)), and whether the project meets the 

additional statutory requirements that apply to this eligible use category.

For more information, recipients may refer to pages 9, 16-19 of the Overview of the 2023 

Interim Final Rule and to the FAQs in section 16.

Additionally, recipients should note the restrictions on use that are applicable across all of 

the eligible use categories. For restrictions on use regarding the categories of replacement 

of lost public sector revenue, public health and negative economic impacts, premium pay, 

and water, sewer, and broadband infrastructure, please see the summary on pages 41-42 of 

the Overview of the 2022 Final Rule. These same restrictions apply to the new eligible use 

categories, described in the 2023 interim final rule, of emergency relief from natural 

disaster, Surface Transportation Projects, and Title I projects. Summary information 

regarding additional statutory requirements that apply to Surface Transportation projects

and Title I projects, including that the total amount of SLFRF funds that a recipient may 

use for Surface Transportation projects and Title I projects, taken together, cannot exceed 

the greater of $10 million and 30% of a recipient’s SLFRF allocation, can be found on 

page 9 of the Overview of the 2023 Interim Final Rule. 

When assessing whether a specific activity may be eligible, recipients are not required to 

submit planned expenditures for prior approval by Treasury, except for certain projects in 

the Surface Transportation projects and Title I projects eligible use categories. Further, 

Treasury is not pre-approving proposed expenditures, except for certain projects in the 

Surface Transportation projects and Title I projects eligible use categories, or calculations 

of revenue loss. Recipients should review the 2022 final rule, Overview of the 2022 Final 

Rule, and Overview of the 2023 Interim Final Rule and consult with counsel as needed, to 

evaluate whether a particular expenditure is an eligible use of SLFRF funds.

4.2. May recipients use funds to invest in traditional infrastructure projects other

than water, sewer, and broadband projects (e.g., roads, bridges)?

First, recipients may utilize SLFRF funds for Surface Transportation projects in the 

following ways: 

• Pathway One: Supplementing Surface Transportation projects receiving funding 
33

from DOT 

• Pathway Two: Funding Surface Transportation projects not receiving funding 

from DOT 

• Pathway Three: Satisfying non-federal share requirements for certain Surface 

Transportation projects or repaying a loan provided under the TIFIA program.

Please see section 16 of the FAQs for more information. 

Second, recipients may use SLFRF funds to provide emergency relief from natural 

disasters for public infrastructure damaged by a natural disaster or for mitigation 

activities to avert the threat of a future natural disaster. See section 15 of the FAQs for 

more information. 

Third, as discussed in FAQ #3.2, recipients have broad flexibility under the revenue loss 

eligible use category to provide government services, which generally include any 

service traditionally provided by a government. These services may include but are not 

limited to maintenance of infrastructure or pay-go spending for building of new

infrastructure, including roads.

Fourth, recipients should note that under the public health and negative economic 

impacts eligible use category, a general infrastructure project typically would not be 

considered an eligible response 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).

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

Under the Surface Transportation projects eligible use category, recipients may use SLFRF 

funds under Pathway Three to repay a TIFIA loan.

Otherwise, generally, no. The 2022 final rule maintains the restriction on the use of funds 

for debt service for the reasons described on page 4430 of the 2022 final rule and clarifies 

that this restriction applies to all eligible use categories. 

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. Are governments required to submit proposed expenditures to

Treasury for approval?

Under the public health and negative economic impacts, premium pay, revenue loss, 

water, sewer, broadband infrastructure, and emergency relief from natural disasters 

eligible use categories, recipients are not required to submit planned expenditures for

prior approval by Treasury.

For Surface Transportation projects undertaken via Pathway One or Pathway Three, 
34

recipients must consult with the DOT. Surface Transportation projects undertaken via the 

streamlined framework described under Pathway Two do not require pre-approval by 

Treasury or the DOT. Recipients that would like to use SLFRF funds for a Surface 

Transportation project under Pathway Two outside the parameters of the streamlined 

framework must email a Notice of Intent to Treasury at NOI-SLFRF@treasury.gov by

December 20, 2023, as stated in the 2023 interim final rule. Treasury will evaluate the 

projects included in these Notices of Intent, along with comments to the 2023 interim 

final rule, to design and implement the framework for approving these types of projects. 

More information about the notice of intent process can be found in the 2023 interim final 

rule. 

For Title I projects, recipients must submit a project-level environmental review 

certification to Treasury and receive Treasury’s approval prior to using SLFRF funds for 

projects under this eligible use category, unless the project meets at least one of the 

criteria listed below. Projects under the Title I eligible use category do not require 

approval from HUD.

Recipients are not required to submit certifications or receive Treasury’s approval and 

may begin using their SLFRF funds right away for Title I projects that are either:

• Exempt activities as described under 24 CFR 58.34(a); or

• Categorically excluded activities not subject to 24 CFR 58.5 as contemplated by 

24 CFR 58.35(b), provided that the circumstances described in 24 CFR 58.35(c) 

are not present.

Recipients are subject to the requirements and guidelines for all eligible use categories 

described in the 2022 final rule and 2023 interim final rule. For more information on 

compliance and reporting, please see the SLFRF Compliance and Reporting Guidance.

4.5. Do restrictions on using 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 funds?

The 2022 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 of SLFRF funds (i.e., the 

state, local, territorial, or Tribal government). Recipients may use SLFRF funds to

provide assistance to households, businesses, and individuals within the eligible use 

categories described in the 2022 final rule for economic harms experienced by those 

households, businesses, and individuals prior to March 3, 2021. The 2023 interim final 

rule permits recipients to use SLFRF funds for the new eligible uses for costs incurred 

beginning on December 29, 2022, which is the date the 2023 CAA was enacted. Please 

see the examples set out below.

• Public Health/Negative Economic Impacts – Recipients may use SLFRF funds to 

provide assistance to households – such as rent, mortgage, or utility assistance –
35

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 – As discussed further in FAQ #5.2, 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. Employers 

may not simply reimburse themselves for pay already received by the employee.

• Revenue Loss – The 2022 final rule gives recipients broad latitude to use funds 

for the provision of government services to the extent of reduction in revenue due 

to the pandemic. If the recipient has elected to calculate lost revenue, the 

calculation begins with the recipient’s revenue in the last full fiscal year prior to 

the COVID-19 public health emergency. However, use of funds for government 

services must be forward looking for costs incurred by the recipient after March

3, 2021.

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

SLFRF funds to make necessary investments in water, sewer, and broadband. See 

FAQ Section 6. Recipients may use funds to cover costs incurred for eligible

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

covered by the funds were incurred after March 3, 2021.

• Emergency Relief from Natural Disasters – Recipients may use SLFRF funds for 

emergency relief from natural disasters. See FAQ Section 15. Funds may be used 

to cover costs incurred beginning on December 29, 2022, regardless of the date of 

the declared natural disaster. Recipients must obligate SLFRF funds for this 

purpose by December 31, 2024, and expend SLFRF funds by December 31, 2026. 

• Surface Transportation – Recipients may use SLFRF funds for certain surface

transportation projects. Funds may be used to cover costs incurred beginning on 

December 29, 2022. See FAQ Section 16. Recipients must obligate SLFRF funds 

by December 31, 2024, and expend SLFRF funds by September 30, 2026. 

• Title I – Recipients may use SLFRF funds for eligible Title I projects. Funds may 

be used to cover costs incurred beginning on December 29, 2022. See FAQ 

Section 16. Recipients must obligate SLFRF funds by December 31, 2024, and 

expend SLFRF funds by September 30, 2026. 

4.6. May recipients use funds to satisfy non-federal matching requirements?

Under the specific circumstances described below, recipients may use SLFRF funds to 

satisfy non-federal matching requirements. Otherwise, recipients may not use SLFRF 
36

funds to meet the non-federal match or cost-share requirement of other federal financial 

assistance programs. 

• Revenue Loss: Funds under the revenue loss eligible use category (sections 

602(c)(1)(C) and 603(c)(1)(C) of the Social Security Act) generally may be used 

to meet the non-federal cost-share or matching requirements of other federal 

programs. However, note that SLFRF funds may not be used as the non-federal 

share for purposes of a state’s Medicaid and Children’s Health Insurance 

Programs (CHIP) because the Office of Management and Budget has approved a 

waiver as requested by the Centers for Medicare & Medicaid Services pursuant 

to 2 CFR 200.102 of the Uniform Guidance and related regulations. 

If a recipient seeks to use SLFRF funds to satisfy match or cost-share 

requirements for a federal grant program, it should first confirm with the relevant 

awarding agency that no waiver has been granted for that program, that no other 

circumstances enumerated under 2 CFR 200.306(b) would limit the use of 

SLFRF funds to meet the match or cost-share requirement, and that there is no 

other statutory or regulatory impediment to using the SLFRF funds for the match 

or cost-share requirement.

• Certain projects described in IIJA: The Infrastructure Investment and Jobs Act 

(IIJA) provides that SLFRF funds may be used to meet the non-federal match 

requirements of authorized Bureau of Reclamation projects and certain 

broadband deployment projects. Recipients should consult the 2022 final rule for 

further details if they seek to utilize SLFRF funds as matching funds for these 

projects.

• Surface Transportation projects under Pathway Three: Recipients may use 

SLFRF funds under Pathway Three of the Surface Transportation projects 

eligible use category to repay a TIFIA loan or satisfy the non-federal share 

requirements of projects eligible under the following programs: INFRA Grants, 

Fixed Guideway Capital Investment Grants, Mega Grants, and projects eligible 

for credit assistance under the TIFIA program, such as to repay a TIFIA loan. 

• Title I projects: Recipients may use SLFRF funds to satisfy the non-federal 

share requirement of a federal financial assistance program in connection with

eligible activities under the CDBG and ICDBG programs. 

4.7. May recipients pool funds for regional projects?

Yes, provided that the project is itself an eligible use of SLFRF funds for each recipient 

that is contributing to the pool of funds and that recipients are able to track the use of funds 

in line with the reporting and compliance requirements of the SLFRF. In general, when 

pooling funds for regional projects, recipients may expend funds directly on the project or 

transfer funds to another government or other entity that is undertaking the project on 

behalf of multiple recipients. To the extent recipients undertake regional projects via 
37

transfer to another organization or government, recipients would need to comply with the 

rules on transfers specified in the 2022 final rule supplementary information. A recipient 

may transfer funds to a government outside its boundaries (e.g., county transfers to a 

neighboring county, or an NEU transferring its funds to a County), provided that the 

transferor can document that the transfer constitutes an eligible expense of the transferor 

government and that its jurisdiction receives a benefit proportionate to the amount 

transferred.

4.8. May recipients fund a project with both ARPA 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? 

Generally, yes, provided that the costs are eligible costs under each source program and are 

compliant with all related statutory and regulatory requirements and policies, as 

applicable, including restrictions on use of funds (e.g., Buy America Preference (see FAQs

#6.18, #6.19), National Environmental Policy Act (see FAQ #6.3)). 

The recipient must comply with applicable reporting requirements for all sources of funds 

supporting the SLFRF project.

The recipient may source funding for a project in multiple ways, including but not limited 

to the following:

• Using funds available under the revenue loss eligible use category for non-federal 

match (see FAQ #4.6)

• Pooling funds for a joint project with another SLFRF recipient (see FAQ #4.7)

• Transferring funds to a subrecipient to finance a project that also uses other 

sources of funding

• Blending or braiding SLFRF funds with other sources of government funding, 

including debt issuance, to pursue a project 

Localities may also transfer their funds to the state through section 603(c)(4) of the Social 

Security Act, which would decrease the locality’s award and increase the state award 

amounts.

Note that using a recipient blending and braiding funds in conjunction with other sources 

of funding is distinct from using funds for non-federal match. In the case of non-federal 

match, the recipient would be using SLFRF funds to satisfy cost-sharing or matching 

requirements in order to qualify for another source of federal funding, while blending and 

braiding refers to using multiple sources of funding for complementary purposes. 

If the entirety of a project is funded with SLFRF funds, then the entire project must be an 

eligible use. The use of funds is subject to the deadline of obligating funds no later than 
38

December 31, 2024, and expending funds no later than December 31, 2026, except for 

Surface Transportation projects and Title I projects that have an expenditure deadline of

September 30, 2026. If a project is partially funded with SLFRF funds, then the relevant 

portion must be an eligible use of SLFRF funds and the SLFRF funds must be obligated by 

December 31, 2024, and expended by December 31, 2026, except for Surface 

Transportation projects and Title I projects that have an expenditure deadline of September 

30, 2026. In either case, recipients must be able to, at a minimum, determine and report to 

Treasury on the amount of SLFRF funds obligated and expended and when such funds 

were obligated and expended.

SLFRF funds may not be used to fund the entirety of a project that is partially, although 

not entirely, an eligible use under the 2022 final rule. However, SLFRF funds may be used 

for a smaller component project that does constitute an eligible use, while other funds are 

used for the remaining portions of the larger planned project that do not constitute an 

eligible use. In this case, the ‘‘project’’ for SLFRF purposes under this program would be 

only the eligible use component of the larger project. For example, a recipient government 

may use SLFRF funds to subsidize the production of affordable housing units as a 

response to the pandemic and its negative economic impacts and use other funds to build 

other parts of a larger development that contains these affordable units.

4.9. May funds be used to make loans or other extensions of credit (“loans”) to 

support an eligible use?

Yes. SLFRF funds may be used to make loans, provided that the loan supports an activity 

that is an eligible use of funds. 

The cost of the loan must be tracked and reported in accordance with the points set out 

below. For example, a recipient may, consistent with the requirements of the 2021 interim 

final rule and 2022 final rule, use funds to finance the construction of affordable housing

or a necessary investment in water, sewer, or broadband infrastructure. For the eligible use

categories outlined in the 2022 final rule, funds may be used to cover “costs incurred” 

beginning on March 3, 2021, and such funds must be obligated by December 31, 2024. For 

the eligible use categories outlined in the 2023 interim final rule, funds may be used to 

cover “costs incurred” beginning on December 29, 2022, and must be obligated by 

December 31, 2024. 

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 (or 

September 30, 2026, for Title I projects), 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 SLFRF funds to fund the principal of the loan and in that 
39

case must track repayment of outstanding principal and interest amounts (i.e., 

“program income” as defined in 2 CFR 200.1).

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 

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

SLFRF funds. 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 (or September 30, 2026,

for Title I projects), the recipient may use funds for only the projected cost of the 

loan. 

o Recipients can project the cost of the loan by estimating the subsidy cost. The 

subsidy cost is the estimated present value of the cash flows from the recipient 

(excluding administrative expenses) less the estimated present value of the 

cash flows to the recipient resulting from a loan, discounted at the recipient’s 

cost of funding and discounted to the time when the loan is disbursed. The 

cash flows are the contractual cash flows adjusted for expected deviations 

from the contract terms (delinquencies, defaults, prepayments, and other 

factors). 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.

o Alternatively, recipients may treat the cost of the loan as equal to the expected 

credit losses over the life of the loan based on the Current Expected Credit 

Loss (CECL) standard. Recipients may measure projected losses either once, 

at the time the loan is extended, or annually over the period of performance. 

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

with maturities longer than December 31, 2026 (or September 30, 2026, for 

Title I projects), recipients would not be subject to restrictions under 2 CFR 

200.307(e)(1) and need not separately track repayment of principal or interest

amounts. 

o Additionally, recipients may use funds for eligible administrative expenses 

incurred in the period of performance, which include the reasonable 

administrative expenses associated with a loan made in whole, or in part, with 

SLFRF funds. See section IV.E of the 2022 final rule.

• Contributions to Revolving Loan Funds. A recipient may contribute SLFRF 
40

funds to a revolving loan fund if the loaned SLFRF funds are restricted to 

financing eligible uses under the public health emergency/negative economic 

impacts, premium pay, necessary water, sewer and broadband infrastructure 

categories (or under the government services category if the contribution to the 

revolving loan fund is made using SLFRF funds), and Title I projects eligible use 

categories. The amount contributed using SLFRF funds must be limited to the 

projected cost of loans made over the life of the revolving loan fund, following 

the approach described above for loans with maturities longer than December 31, 

2026 (or September 30, 2026, for Title I projects). 

• Loans funded with SLFRF funds under the revenue loss eligible use category. 

Notwithstanding the above, if a recipient uses SLFRF funds under the revenue 

loss eligible use category to fund a loan, whether or not the maturity of the loan is 

after December 31, 2026, the loaned funds may be considered to be expended at 

the point of disbursement to the borrower, and repayments on such loans are not 

subject to program income rules. Similarly, any contribution of revenue loss funds 

to a revolving loan fund may also follow the approach of loans funded under the 

revenue loss eligible use category.

• Loans to fund investments in affordable housing projects. Notwithstanding the 

above requirements for loans with maturities beyond December 31, 2026, 

Treasury has determined that SLFRF funds may be used to finance certain loans 

that finance affordable housing investments, as it is typical for state and local 

governments to finance such investments through loans and because the features 

of these loans significantly mitigate concerns about funds being deployed for 

purposes of recycling funds, potentially for ineligible uses, following the SLFRF 

program’s expenditure deadline. Specifically, under the “public health and 

negative economic impacts” eligible use category, recipients may use SLFRF 

funds to make loans to finance affordable housing projects, funding the full 

principal amount of the loan, if the loan and project meet the following 

requirements:

o The loan has a term of not less than 20 years;

o The affordable housing project being financed has an affordability period of 

not less than 20 years after the project or assisted units are available for 

occupancy after having received the SLFRF investment; and

o For loans to finance projects expected to be eligible for the low-income 

housing credit (LIHTC) under section 42 of the Internal Revenue Code of 

1986 (the Code), 

▪ the project owner must agree, as a condition for accepting such a loan, 

to waive any right to request a qualified contract (as defined in section 

42(h)(6)(F) of the Code); and

▪ the project owner must agree to repay any loaned funds to the entity 

that originated the loan at the time the project becomes non-compliant, 

including if such project ceases to satisfy the requirements to be a 

qualified low-income housing project (as defined in section 42(g) of 

the Code) or a qualified residential rental project (as defined in section 
41

142(d) of the Code), or if such project fails to comply with any of the 

requirements of the extended low-income housing commitment that 

are described in section 42(h)(6)(B)(i)-(iv) of the Code.

Loans that fund investments in affordable housing projects under the public health 

and negative economic impacts eligible use category and meet the above criteria 

may be considered to be expended at the point of disbursement to the borrower, 

and repayments on such loans are not subject to program income rules. Loan 

modifications are permitted if the modifications do not result in repayment of all 

or substantially all funds to the lender prior to the end of the affordability period. 

To reduce administrative complexity, the start date of the 20-year affordability 

covenant may conform to the start date of other covenants on the same project or 

units that are required by another source of federal or state funding associated 

with the project or units.

4.10. May funds be used for outreach to increase uptake of federal assistance 

like the Child Tax Credit or federal programs like SNAP?

Yes. Eligible uses to address negative economic impacts include “assistance 

accessing or applying for public benefits or services.” This can include 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.” Of note, per the 2022 final rule, allowable uses of funds for evaluations 

may also include other types of program evaluations focused on program

improvement and evidence building. 

4.11 How does the end of the COVID-19 National Emergency, declared by the 

President in 2020, have an impact on the SLFRF program?

The end of the COVID-19 National Emergency has an impact on one of the eligible use

categories of SLFRF funds, Premium Pay. There are no impacts on the other eligible use

categories.

On March 29, 2023, Congress voted to terminate the National Emergency concerning 

COVID-19 that President Trump had declared in 2020 pursuant to the National 

Emergencies Act. This termination is effective as of April 10, 2023. The 2022 final rule 

defines “COVID-19 public health emergency” by including reference to this National 

Emergency declaration, providing that the COVID-19 public health emergency is the 

“period beginning on January 27, 2020 and lasting until the termination of the national 

emergency concerning the COVID-19 outbreak declared pursuant to the National 

Emergencies Act (50 U.S.C. 1601 et seq.).”5

Following the termination of the National Emergency, recipients generally will be able to 

continue to make investments using their SLFRF funds without changes, with the exception 

of projects in the premium pay eligible use category, as discussed below. Specifically:

5 31 CFR 35.3. 
42

• Premium Pay: The SLFRF statute and the 2022 final rule provide that recipients 

can use SLFRF funds to provide premium pay to eligible workers performing 

essential work during the COVID-19 public health emergency, as defined in the 

2022 final rule as the period ending when the COVID-19 National Emergency 

ends (i.e., until termination of the National Emergency described above). 

Accordingly, recipients may not use SLFRF funds to provide premium pay to 

essential workers for work performed after the end of the National Emergency on 

April 10, 2023. Recipients may continue to make payments retroactively for 

premium pay for work performed between the start of the pandemic and April 10, 

2023. The obligation to provide such premium pay must not have been incurred 

by the recipient prior to March 3, 2021. 

• Public Health and Negative Economic Impacts: SLFRF recipients may continue 

to use funds to respond to the public health impacts or negative economic impacts 

of the COVID-19 pandemic. This eligible use does not require recipients’ 

responses to be provided during the National Emergency. Under this eligible use 

category, recipients may continue to use SLFRF funds to support and expand the 

workforce, including by helping impacted workers enter in-demand careers, such 

as in health care and child care. Recipients may also use SLFRF funds to build 

public sector capacity, including hiring public sector workers and providing 

retention incentives. In addition, using funds for payroll under this eligible use is 

distinct from the premium pay eligible use category and is not affected by the end 

of the National Emergency. Payroll remains an eligible use of SLFRF funds.

• Revenue Loss: The end of the National Emergency does not impact how 

recipients calculate revenue loss according to the formula articulated in the 2022 

final rule. The end of the National Emergency also does not have an impact on 

how recipients claim up to $10 million in revenue loss under the standard 

allowance. In addition, the end of the National Emergency does not have an 

impact on how recipients may use their revenue loss funds, including for payroll 

or premium pay.

• Water/Sewer/Broadband: The end of the National Emergency does not have an 

impact on how recipients may use SLFRF funds under the water, sewer, and 

broadband infrastructure eligible use category.

• Emergency Relief from Natural Disasters, Surface Transportation projects, and 

Title I projects: These eligible use categories are not impacted by the termination 

of the National Emergency.

In addition, on May 11, 2023, the Biden-Harris Administration ended the COVID-19 

Public Health Emergency declared by the Secretary of the U.S. Department of Health and 

Human Services (HHS) pursuant to the Public Health Service Act (42 U.S.C. 247d). The 

end of the COVID-19 Public Health Emergency does not have an impact on recipients’ 

ability to spend funds under the SLFRF program.

5. Eligible Uses – Premium Pay

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

premium pay?
43

SLFRF may be used to provide premium pay to eligible workers performing essential 

work during the pandemic or to provide grants to eligible employers that have eligible 

workers who perform essential work. Premium pay may be awarded to eligible workers 

up to $13 per hour. Premium pay must be in addition to wages or remuneration (i.e., 

compensation) the eligible worker otherwise receives. Premium pay may not exceed 

$25,000 for any single worker during the program. 

Premium pay must be responsive to eligible workers performing essential work during the 

pandemic, and like the 2021 interim final rule, the 2022 final rule emphasizes the need for

recipients to prioritize premium pay for lower-income workers. Premium pay that would 

go to a worker whose total pay is above 150% of the greater of the state or county average 

annual wage for all occupations (with or without the premium) requires specific

justification for how it responds to the needs of these workers unless that worker is not 

exempt from the Fair Labor Standards Act overtime provisions.

For a detailed description of what constitutes an eligible worker and essential work, as 

well other premium pay requirements, please see pages 35-36 of the Overview of the 

2022 Final Rule. Recipients should also review FAQ #4.11 which describes that 

following the end of the public health emergency on April 10, 2023, recipients may not 

provide premium pay for work performed after that date. Recipients may continue to 

provide premium pay for work performed prior to that date. 

5.2. 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. SLFRF funds 

may not be used to reimburse a recipient or eligible employer grantee for premium pay or 

hazard pay already received by the employee. To make retroactive premium payments 

funded with SLFRF funds, a recipient or eligible employer grantee must make a new cash 

outlay for the premium payments and the payments must be in addition to any wages or 

remuneration the eligible worker already received.

5.3. Can SLFRF be used to pay for benefits and taxes associated with premium pay 

wages?

Premium pay is taxable as wage income, and therefore, employers are encouraged to treat 

the premium pay earned by the employee just as they would other wage income and 

withhold from the additional pay any required taxes. For further guidance, please see the 

FAQ published by the IRS on SLFRF.

5.4. Does non-base compensation, such as overtime, count toward the 150% pay 

threshold? Is the 150% threshold calculated based off of income only from the 

awarding employer or from an employee’s total yearly compensation? 
44

Yes, non-base compensation, including overtime and bonuses, counts toward the 150% 

pay threshold; however, the 150% pay threshold does not take into account other sources 

of income earned by an employee (e.g., income from a second job). For an hourly 

employee, or an employee that does not have a year’s worth of earnings, an employer 

should extrapolate the hourly wage at an annual rate by multiplying the hourly rate by forty 

hours per week and then by fifty-two weeks per year. 

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

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

Eligible water and sewer projects are outlined on pages 37-38 of the Overview of the 2022 

Final Rule. Under the 2021 interim final rule, SLFRF funds could be used to fund projects 

that would be eligible under EPA’s Clean Water State Revolving Fund or Drinking Water 

State Revolving Fund. With broadened eligibility under the 2022 final rule, SLFRF funds 

may also be used to fund additional types of projects — such as additional stormwater 

infrastructure, residential wells, lead remediation, and certain rehabilitations of dams and 

reservoirs — beyond the CWSRF and DWSRF, if they are found to be “necessary” 

according to the definition provided in the 2022 final rule and outlined on page 38 of the 

Overview of the 2022 Final Rule. 

6.2. May recipients use funds as a non-federal match for the Clean Water State 

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

Per FAQ #4.6, SLFRF funds available for the provision of government services, up to the 

amount of the recipient’s reduction in revenue due to the public health emergency (the 

revenue loss eligible use category), may be used to meet the non-federal cost-share or 

matching requirements of other federal programs, including the CWSRF and DWSRF

programs administered by the EPA. Per FAQ #4.9, loans funded under the revenue loss

eligible use category may be deemed expended at the point of disbursement. Thus, 

recipients using SLFRF funds available under revenue loss for non-federal matching 

requirements for the DWSRF or CWSRF may consider funds expended at the point the 

recipient makes the deposit into the State Revolving Funds. Recipients using SLFRF funds 

available under revenue loss should log projects under expenditure category 6.2.

As further noted in FAQ #4.6, SLFRF funds beyond those that are available under the 

revenue loss eligible use category may not be used to meet the non-federal match or costshare requirements of other federal programs, other than as specifically provided for by 

statute. Recipients using funds under the eligible use category for water and sewer 

infrastructure may not use funds as a state match for the CWSRF and DWSRF.

6.3. Does the National Environmental Policy Act (NEPA) apply to projects funded with 

SLFRF funds?

NEPA requirements do not apply to Treasury’s administration of SLFRF funds, under the 
45

following eligible use categories: revenue loss; public health and negative economic 

impacts; water, sewer, and broadband infrastructure; and emergency relief from natural 

disasters. 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 or have

certain federal licensing or registration requirements.

However, NEPA requirements apply to Surface Transportation projects and Title I 

projects. Please see FAQ #16.16 for additional information about these eligible use 

categories. 

6.4. What types of broadband projects are eligible uses of funds?

Recipients are required to design projects that, upon completion, reliably meet or exceed 

symmetrical 100 Mbps download and upload speeds where practicable. More details on 

eligible broadband projects, including eligible areas for investment and the affordability 

requirement, are outlined on pages 39-40 of the Overview of the 2022 Final Rule.

6.5. For broadband investments, may recipients use funds for related programs such

as cybersecurity or digital literacy training?

Yes. In the 2022 final rule, Treasury maintained the enumerated eligible use for assistance 

to households for internet access and digital literacy programs. Recipients may use funds 

to provide assistance to households facing negative economic impacts due to the pandemic, 

including digital literacy training and other programs that promote access to the Internet.

SLFRF may be used for modernization of cybersecurity for existing and new broadband 

infrastructure, regardless of their speed delivery standards. This includes modernization of 

hardware and software. Under the 2022 final rule, recipients may also invest in general 

cybersecurity upgrades, unrelated to broadband infrastructure, under the revenue loss 

eligible use category.

6.6. Do I need pre-approval for my water, sewer, or broadband project? 

See FAQ #4.4. Generally, recipients are not required to submit planned expenditures for

prior approval by Treasury and recipients are subject to the requirements and guidelines for 

eligible uses contained in the 2022 final rule.

While recipients must ensure that water and sewer infrastructure projects are eligible under 

the 2022 final rule, recipients are not required to obtain project pre-approval from Treasury 

or any other federal agency when using SLFRF funds for necessary water and sewer 

infrastructure projects unless otherwise required by federal law. For projects that are 

pursued under the eligibility categories provided through the DWSRF or CWSRF 

programs, project eligibilities are based on federal project categories and definitions for the 

programs and not on each state’s eligibility or definitions. While reference in the 2022 

final rule to the DWSRF, CWSRF, or other federal water programs is provided to assist 

recipients in understanding the types of water and sewer infrastructure projects eligible to 
46

be funded with SLFRF, recipients do not need to apply for funding from the applicable 

state programs or through any federal water program. Similarly, besides eligible project 

categories, the 2022 final rule does not incorporate other program requirements or 

guidance that attach to the DWSRF, CWSRF, or other federal water programs. However, 

as noted above, recipients should be aware of other federal or state laws or regulations that 

may apply to construction projects or water and sewer projects, independent of SLFRF 

funding conditions, and that may require preapproval from another federal or state agency.

6.7. For broadband infrastructure investments, what are eligible areas of investment?

Recipients are encouraged to prioritize projects that are designed to serve locations without 

access to reliable wireline 100/20 Mbps broadband service, but are broadly able to invest 

in projects designed to provide service to locations with an identified need for additional 

broadband investment. For more details, see page 39 of the Overview of the 2022 Final 

Rule.

6.8. May recipients use payments from the SLFRF for “middle mile” broadband

projects?

Yes. Under the 2022 final rule, recipients may use payments from the SLFRF for “middlemile 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.

6.9. For broadband infrastructure investments, what does the requirement to 

“reliably” meet or exceed a broadband speed threshold mean? 

See page 39 of the Overview of the 2022 Final Rule, as well as pages 4419-4420 of the 

2022 final rule. 

6.10. May recipients use funds for pre-project development for eligible water, sewer,

and broadband projects? 

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

(DWSRF and CWSRF, 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 preproject development, including planning and assessment activities, such as cost and 

effectiveness analyses, water/energy audits and conservation plans, and capital

improvement plans.
47

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 by recipients within the statutory period between March 3, 

2021, and December 31, 2024, and expended to cover such obligations by December 31,

2026.

6.11. May funds be used to support energy or electrification infrastructure that would

be used to power new water treatmentplants and wastewater systems?

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, SLFRF 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

funds.

6.12. How should states and local governments assess whether a stormwater 

management project, such as a culvert replacement, is an eligible project under the 

water and sewer eligible use category?

Pages 37-38 of the Overview of the 2022 Final Rule describe the overall approach that 

recipients must take to evaluate the eligibility of water or sewer projects. With broadened 

eligibility under the 2022 final rule, a wide range of culvert repair, resizing, and removal, 

replacement of storm sewers, and additional types of stormwater infrastructure are eligible 

projects, as outlined further in the 2022 final rule.

6.13. May recipients use funds for road repairs and upgrades that occur in connection

with an eligible water or sewer project?

Under the water and sewer infrastructure eligible use category, recipients may use SLFRF

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. Water and sewer infrastructure projects are often a single

component of a broader transportation infrastructure project, such as, for example, the

implementation of stormwater infrastructure needed to meet water quality standards

established under the Clean Water Act. In this example, the components of the 
48

infrastructure project that interact directly with the stormwater infrastructure may be 

funded by SLFRF funds under the water and sewer infrastructure eligible use category.

Recipients seeking to use SLFRF funds for road repairs and upgrades can find additional 

information about the Surface Transportation projects eligible use category in section 16 of 

the FAQs.

6.14. May funds be used to build or upgrade broadband connections to schools or

libraries? 

As outlined in the 2022 final rule, recipients may use SLFRF funds to invest in broadband

infrastructure that, where practicable, is designed to deliver service that reliably meets or 

exceeds symmetrical upload and download speeds of 100 Mbps to households or 

businesses with an identified need for additional broadband investment. “Businesses” in 

this context refers 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.

6.15. Are eligible water, sewer, and broadband infrastructure projects, eligible 

capital expenditures under the public health and negative economic impacts eligible 

use category, eligible projects under the revenue loss eligible use category, eligible 

emergency relief from natural disasters, eligible Surface Transportation projects, and 

eligible Title I projects subject to the Davis-Bacon Act?

The Davis-Bacon Act requirements (prevailing wage rates) do not apply to projects funded 

solely with award funds from the SLFRF program, under the public health and negative 

economic impacts, revenue loss, water, sewer, and broadband infrastructure, emergency 

relief from natural disasters eligible use categories, and for Tribal governments, the Title I 

projects eligible use categories, except for SLFRF-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 (SLFRF 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-Bacon Act when SLFRF 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 #4.8 concerning projects funded with both SLFRF funds and other sources of

funding.

In the 2022 final rule, Treasury indicated the importance of capital expenditure projects 

and necessary investments in water, sewer, or broadband infrastructure be carried out in 

ways that produce high-quality results, avert disruptive and costly delays, and promote

efficiency. Additionally, Treasury indicated in the 2023 interim final rule that it is 

important that emergency relief from natural disasters projects that involve construction, 

such as public infrastructure and mitigation activities, be carried out similarly. Treasury 

encourages recipients to ensure that capital expenditure projects, water, sewer, and 
49

broadband projects, and emergency relief from natural disasters construction 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 projects, but 

also to support the economic recovery through strong employment opportunities for

workers. Using these practices in 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.

In addition, Treasury has stated in its reporting guidance that recipients will need to 

provide documentation of wages and labor standards for capital expenditure projects,

water, sewer, and broadband infrastructure, and emergency relief from natural disasters 

construction projects over $10 million, and that that these requirements can be met with 

certifications that the project is in compliance with the federal 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 for more detailed 

information on the reporting requirement.

For the Surface Transportation projects and Title I projects eligible use categories provided 

under the 2023 CAA, the Davis-Bacon Act applies, except for Title I projects undertaken 

by Tribal governments, as stated above. See also FAQ #16.2.

6.16. What is the difference between using funds for eligible water and sewer projects 

and using funds under revenue loss for non-federal match for the Clean Water State 

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

As noted in FAQ #6.1 and the Overview of the 2022 Final Rule, eligible projects that a 

recipient may fund under the water and sewer infrastructure eligible use category of 

SLFRF include eligible projects under EPA’s CWSRF and EPA’s DWSRF. Recipients 

may also fund certain additional projects, including a wide set of lead remediation, 

stormwater infrastructure, and aid for private wells and septic units. Per FAQ #6.6, 

recipients spending SLFRF funds under the water and sewer eligible use category are not 

required to obtain project pre-approval from Treasury or any other federal agency unless 

otherwise required by federal law. 

Projects that recipients undertake with SLFRF funds under the water and sewer eligible use 

category are separate and distinct from projects that a recipient manages through their 

CWSRF and DWSRF. As noted in FAQ #4.6 and FAQ #6.2, recipients may use funds 

under the revenue loss eligible use category for non-federal matching requirements, 

including for EPA’s Clean Water State Revolving Fund and EPA’s Drinking Water State 

Revolving Fund. By contrast, funds spent under the water and sewer infrastructure eligible 

use category may not be used to meet non-federal matching requirements.

6.17. Can SLFRF funds be used to pay for the replacement or placement of utility 

poles under the water, sewer, and broadband infrastructure eligible use category?
50

Under the water, sewer, and broadband infrastructure eligible use category, the 

replacement or placement of utility poles is eligible when it is directly related to or part of 

an eligible SLFRF infrastructure project, such as an eligible SLFRF broadband 

infrastructure project that is consistent with Treasury’s 2022 final rule. The use of SLFRF 

funds to fund a project for which the only purpose is to pay for the replacement or 

placement of utility poles is not an eligible use under the water, sewer, broadband 

infrastructure eligible use category.

6.18. Do the Buy America Preference requirements for infrastructure projects apply 

to awards made under the SLFRF program?

Awards made under the SLFRF program are not subject to the Buy America Preference 

requirements set forth in section 70914 of the Build America, Buy America Act included 

in the Infrastructure Investment and Jobs Act, Pub. L. 117-58. 

As such, infrastructure projects undertaken solely using SLFRF award funds are not 

subject to the Buy America Preference requirements set forth in section 70914 of the Build 

America, Buy America Act included in the Infrastructure Investment and Jobs Act, Pub. L. 

117-58. However, as described below, certain Surface Transportation projects are subject 

to domestic procurement preference requirements. 

In the case of Pathway One and Pathway Three under the Surface Transportation projects 

eligible use category, under which recipients use SLFRF funds along with funding 

provided by the Department of Transportation (DOT), the Buy America preference 

requirements of titles 23, 40, or 49 of the U.S. Code apply to the use of SLFRF funds, as 

part of the DOT’s regular administration of its federal financial assistance programs. 

Furthermore, as described in FAQ #6.19, recipients may be subject to the Buy America 

Preference requirements set forth in the Build America, Buy America Act included in the 

Infrastructure Investment and Jobs Act, Pub. L. 117-58 when SLFRF funds are used on an 

infrastructure project in conjunction with funds from DOT.

Recipients generally must satisfy the Buy America requirements of titles 23, 40, or 49 of 

the U.S. Code when SLFRF funds are used on Surface Transportation projects under 

Pathway Two. For instance, under titles 23 and 49 of the U.S. Code, certain DOT 

programs are subject to the Buy America domestic content procurement preference related 

to steel, iron, and manufactured goods. However, under the streamlined framework under 

Pathway Two, recipients are not required to satisfy the Buy America requirements. As 

stated in the 2023 interim final rule, the Buy America requirements apply to Surface 

Transportation projects that do not meet the criteria for the streamlined framework, and 

Treasury will work with recipients to comply with Buy America requirements for SLFRFfunded projects outside of the streamlined framework.

6.19. Do the Buy America Preference requirements for infrastructure projects apply 

to SLFRF-funded projects if they are supplemented with funding from other federal 

financial assistance programs?
51

As stated in FAQ #6.18, infrastructure projects funded solely with SLFRF award funds are 

not subject to the Buy America Preference requirements set forth in section 70914 of the 

Build America, Buy America Act included in the Infrastructure Investment and Jobs Act,

Pub. L. 117-58. However, SLFRF recipients may be otherwise subject to the Buy America 

Preference requirements if SLFRF funds are used on an infrastructure project in 

conjunction with funds from other federal programs that require compliance with the Buy 

America requirements. Recipients are advised to consult with the other federal agency(ies)

administering federal financial assistance that is being blended or braided with SLFRF 

funds regarding the applicability of the Buy America Preference requirements (see FAQ 

#4.8).

6.20. Does Section 106 of the National Historic Preservation Act (NHPA) apply to 

projects funded with SLFRF funds?

For the eligible use categories described in the 2022 final rule and the emergency relief 

from natural disasters eligible use category described in the 2023 interim final rule, Section 

106 of the NHPA does not apply to Treasury’s administration of SLFRF funds. Under 

these eligible use categories, projects supported with payments from SLFRF funds may be 

subject to Section 106 of the NHPA if they involve other federal agencies’ participation, 

including funding from other federal financial assistance programs, or are subject to receipt 

of approvals from other federal agencies.

In the case of Surface Transportation projects under Pathway One and Pathway Three, 

Section 106 of the NHPA applies consistent with how it would otherwise apply as part of 

DOT’s administration of the project. 

To qualify for the streamlined framework under Pathway Two, recipients must design 

projects that meet three criteria specified in the 2023 interim final rule, including limiting 

the project scope to a set of actions or activities deemed by DOT as meeting the criteria for

a categorical exclusion as listed under 23 C.F.R. 771.116(c)(1)-(22), 771.117(c)(1)-(30), 

and 771.118(c)(1)-(16). In addition, as part of determining that a project meets a 

categorical exclusion, recipients must demonstrate that their actions do not involve unusual 

circumstances, as described in 23 CFR 771.116(b), 771.117(b), and 771.118(b). Such 

unusual circumstances include significant environmental impacts; substantial controversy 

on environmental grounds; significant impact on properties protected by Section 4(f) of the 

Department of Transportation Act of 1966 or Section 106 of the NHPA; or inconsistencies 

with any federal, state, or local law, requirement, or administrative determination relating 

to the environmental aspects of the action.

Eligible Surface Transportation projects under the streamlined framework in Pathway Two 

may still be subject to NEPA review and other environmental statutes, such as Section 106 

of the NHPA, if they are also funded by other federal financial assistance programs or have 

certain federal licensing or registration requirements.

In the case of Title I projects, Section 106 of the NHPA does not apply to a project that 

either is: 
52

• An ‘‘exempt activity’’ as contemplated by 24 CFR 58.34(a), or 

• ‘‘Categorically excluded’’ and not subject to 24 CFR 58.5, as contemplated by 24 

CFR 58.35(b), provided that the extraordinary circumstances described in 24 CFR 

58.35(c) are not present.

For Title I projects that do not satisfy either of the above criteria, the requirements of 

Section 106 of the NHPA apply, and recipients must assume responsibilities, as the 

responsible entity, for environmental review, decision-making and action that would 

generally apply to federal agencies under Section 106 of the NHPA. Treasury will provide 

additional information on NHPA-related compliance as part of forthcoming information on 

environmental review requirements.

7. Non-Entitlement Units (NEUs)

Answers to frequently asked questions on distribution of SLFRF funds to NEUs can be 

found in this FAQ supplement.

8. Ineligible Uses

8.1. 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 reserve 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.

8.2. 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?

In the context of the restriction on deposits into pension funds, “deposit” means an 

extraordinary payment of an accrued, unfunded liability. The term deposit does not refer 

to routine contributions made by an employer to pension funds as part of the employer’s 

obligations related to payroll, such as either a pension contribution consisting of a normal 

cost component related to current employees or a component addressing the amortization 

of unfunded liabilities calculated by reference to the employer’s payroll costs.

In general, if an employee’s wages and salaries are an eligible use of SLFRF funds,

recipients may treat the employee’s covered benefits as an eligible use of funds.
53

8.3. May recipients use Fiscal Recovery Funds to fund Other Post-Employment 

Benefits (OPEB)?

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) of the Social Security Act, which refer only to

deposits to pensions funds, do not prohibit SLFRF recipients from funding OPEB.

Recipients may use funds for eligible uses, and a recipient seeking to use SLFRF funds 

for OPEB contributions would need to justify those contributions under one of the seven

eligible use categories.

9. Reporting

Recipients should consult the Recipient Compliance and Reporting Responsibilities page 

on Treasury’s website to access the latest Compliance and Reporting Guidance. Recipients

should consult this guidance for additional detail and clarification on recipients’

compliance and reporting responsibilities. User guides, which also contain FAQs 

pertaining to reporting, are provided for additional information. 

10. Miscellaneous

10.1. Are recipients required to remit interest earned on SLFRF payments made by

Treasury?

No. SLFRF 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. SLFRF payments made by Treasury to local governments and Tribes are not 

subject to the requirements of 2 CFR 200.305(b)(8) and (9) to maintain SLFRF award 

funds in an interest-bearing account and remit interest earned above $500 on such 

payments to Treasury. Moreover, interest earned on SLFRF award funds 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.

10.2. May recipients use funds to cover the costs of consultants to assist with

managing and administering the funds?

Yes. Recipients may use funds for administering the SLFRF program, including costs of 
54

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 American Rescue Plan Act of 2021 set forth the jurisdictions eligible to receive funds 

under the SLFRF 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 Unique Entity ID (UEI) as part of registration in 

addition to maintaining an active registration in the System for Award Management 

(SAM) (https://www.sam.gov).

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.

More information on these and all program pre-submission requirements can be found on

the SLFRF website.

11.5. Why is Treasury employing ID.me for the Treasury Submission Portal?
55

ID.me is only required for submitting applications for funding in the Treasury Portal. 

ID.me is not required for users accessing the Treasury portal to complete reporting.

ID.me provides secure digital identity verification to those government agencies and

healthcare providers to validate the individual entity – and block fraudulent attempts to 

access 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 the Treasury Submission 

Portal?

The ARPA 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

SLFRF@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 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 the

Treasury Submission Portal.

11.9. My Treasury Submission Portal submission requires additional 

information/correction. What is the process for that?

If your Authorized Representative has not yet signed the award terms, you can edit your

submission within the Treasury Submission Portal. If your Authorized Representative has

signed the award terms, please email SLFRF@treasury.gov to request assistance with

updating your information.
56

11.10. 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

SLFRF@treasury.gov.

11.11. 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.

11.12. 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 

SLFRF, do not impose antidiscrimination requirements on Tribal governments beyond 

what would otherwise apply under federal law. Treasury has amended its reporting 

requirements with respect to the SLFRF, Treasury’s Emergency Rental Assistance 

Program, and Homeowner Assistance Fund to reflect this clarification.

12.2. How does a Tribal government determine its allocation?

Tribal governments received information about their allocation when their submission to

the Treasury Submission Portal was confirmed to be complete and accurate.

13. Uniform Guidance
57

13.1. 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 at

https://sam.gov/fal/7cecfdef62dc42729a3fdcd449bd62b8/view.

For information related to Single Audit requirements specifically, please refer to the 

Compliance Supplement materials released by the Office of Management and Budget.

13.2. Do federal procurement requirements apply to SLFRF? 

Yes. The procurement standards for federal financial assistance are located in the Uniform 

Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards at 2 CFR 200.317 through 2 CFR 200.327 and apply to procurements using 

SLFRF funds. Pursuant to 2 CFR 200.317, recipients that are non-state entities, such as, 

metropolitan cities, counties, non-entitlement units of local government, and Tribes must 

comply with the procurement standards set forth in 2 CFR 200.318, through 2 CFR 

200.327, when using their SLFRF award funds to procure goods and services to carry out 

the objectives of their SLFRF award. States, the District of Columbia, and U.S. Territories 

must follow their own procurement policies pursuant to 2 CFR 200.317, as well as comply 

with the procurement standards set forth at 2 CFR 200.321 through 2 CFR 200.323, and 2 

CFR 200.327 when using their SLFRF award funds to procure goods and services to carry 

out the objectives of their SLFRF award. See also SLFRF Award Terms and Conditions.

Recipients are prohibited from using SLFRF funds to enter into subawards and contracts 

with parties that are debarred, suspended, or otherwise excluded from or ineligible for 

participation in Federal assistance programs. See 2 CFR 200.214.

Moreover, a contract made under emergency circumstances under the Coronavirus Relief 

Fund (CRF) cannot automatically be transferred over to SLFRF. These programs are 

subject to different treatment under the Uniform Guidance. Under the CRF program, 

recipients are permitted to use their own procurement policies to acquire goods and 

services to implement the objectives of the CRF award. Under the SLFRF program, 

recipients are required to follow the procurement standards set out in 2 CFR Part 200 

(Uniform Guidance) pursuant to the SLFRF Award Terms and Conditions executed by the 

recipients in connection with their SLFRF awards.

13.3. What is the threshold for competitive bidding for my government?

As stated above, recipients are required to comply with the procurement standards set forth 

in 2 CFR 200.317 through 2 CFR 200.327 of the Uniform Administrative Requirements, 

Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). 
58

Pursuant to 2 CFR 200.317, States, the District of Columbia, and U.S. Territories should 

refer to the competitive bidding thresholds described in their own procurement policies and 

procedures. Other non-federal entities, such as metropolitan cities, counties, nonentitlement units of local government, and Tribes must adhere to the competitive bidding 

thresholds set forth in 2 CFR 200.320 for the relevant procurement methods. 

2 CFR 200.320 describes methods of procurement based on two procurement thresholds. 

There are two thresholds that recipients should keep in mind related to procurement 

requirements: the Micro purchase threshold (MPT) and the Simplified Acquisition 

Threshold (SAT).

Micro-purchase threshold (MPT) - 2 CFR 200.320(a)(1): Purchase of supplies and services 

for a price below the MPT, currently set at $10,000, are not required to be solicited 

competitively. However, there are circumstances when a recipient may have a MPT that is 

greater than $10,000. For example, all non-Federal entities may increase their MPT up to 

$50,000 if they follow the protocols described in 200.320(a)(1)(iv). Additionally, nonfederal entities such as metropolitan cities, counties, non-entitlement units of local 

government, and Tribes may use their own MPT if they follow the protocols described in 

200.320(a)(1)(iv). 

Simplified Acquisition Threshold (SAT) - 2 CFR 200.320(a)(2): Purchases of property and 

services at a price above the recipient’s MPT and below the SAT, currently set at 

$250,000, may be made following the small purchase procedures described in the 

definition of SAT in 2 CFR 200.1 and 2 CFR 200.320(a)(2). Procurement of property and 

services at a price above the SAT must follow the formal procurement methods outlined in 

2 CFR 200.320(b).

13.4. Can a recipient prequalify firms for projects funded with SLFRF?

The Uniform Guidance permits recipients to use prequalified lists of persons, firms, or 

products so long as a list is current and includes enough qualified sources to ensure 

maximum open and free competition. The Uniform Guidance does not specifically define 

the term “current” for purposes of 2 CFR 200.319(e), and Treasury has not adopted 

additional guidance regarding this requirement as it applies to the SLFRF. As such, 

recipients must determine when a prequalified list would be sufficiently current, and a 

recipient must not preclude potential bidders from qualifying during the solicitation period. 

See 2 CFR 200.319(e). Furthermore, recipients may not utilize this provision to evade 

conducting their procurement transactions in a manner that provides for full and open 

competition. 

Recipients should be mindful that other provisions of the Uniform Guidance inform the 

procurement requirements. For example, metropolitan cities, counties, non-entitlement 

units of local government, and Tribes must have and use documented procurement 

procedures, consistent with binding State, local, and Tribal laws and regulations. See 2 

CFR 200.318(a).

13.5. Where can one find the most current information on assuring minority-
59

owned businesses are included in the awards process?

The most up-to-date information on assuring that minority-owned businesses are included 

in the procurement process is located in 2 CFR 200.321, Contracting with small and 

minority businesses, women's business enterprises, and labor surplus area firms. 

13.6. Is there certain language that needs to be included in a bidding package?

Treasury does not require that there be specific language included in bidding packages, but 

SLFRF recipients must ensure all contracts made with SLFRF award funds contain the 

applicable contract provisions listed in 2 CFR Part 200, Appendix II. 

13.7. Are recipients allowed to leverage existing contracts?

Recipients may leverage existing contracts for SLFRF activities if the existing contracts 

conform to the procurement standards in the Uniform Administrative Requirements, Cost 

Principles, and Audit Requirements for Federal Awards in 2 CFR Part 200 (Uniform 

Guidance). States, the District of Columbia, and U.S. Territories must follow their own 

procurement policies pursuant to 2 CFR 200.317 as well as comply with the procurement 

standards set forth at 2 CFR 200.321 – 200.323, and 2 CFR 200.327. All other recipients 

must follow 2 CFR 200.318, General procurement standards, through 200.327, Contract 

provisions.

13.8. Would an interlocal agreement—an agreement entered into between 

governments to effectuate an eligible use of the funds—or a cooperative 

purchase agreement need to be bid out?

States, the District of Columbia, and U.S. Territories must follow their own procurement 

policies pursuant to 2 CFR 200.317 as well as comply with the procurement standards set 

forth at 2 CFR 200.321 through 2 CFR 200.323, and 2 CFR 200.327. All other recipients 

must follow 2 CFR 200.318, General procurement standards, through 200.327, Contract 

provisions.

Recipients should consult the applicable procurement standards or policies to determine 

whether a cooperative purchase agreement must be bid out. Information on when 

competition is required and when exceptions to competition are permitted are located in 2 

CFR 200.319, Competition, and 2 CFR 200.320, Methods of procurement to be followed.

It is permissible for recipients to use interlocal agreements but procurement standards set 

forth in the Uniform Guidance may still apply. 

13.9. How is a “contract” different than a “subaward?

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for 

Federal Awards in 2 CFR Part 200 (Uniform Guidance) provides definitions for “contract” 

and “subaward.” A contract is a legal instrument by which a recipient or subrecipient 
60

purchases property or services needed to carry out the project or program under a federal 

award. A subaward is distinct from a contract in that a subaward is an award provided by a 

recipient of a federal award to a subrecipient to carry out part of a federal award on behalf 

of the recipient. Recipients may make subawards through any form of legal agreement, 

including an agreement that the recipient considers a contract. See 2 CFR 200.331 for 

more information on the differences between contracts and subawards. 

13.10. What other background laws must recipients comply with?

SLFRF recipients must comply with all laws outlined in the SLFRF Award Terms and 

Conditions that the recipients accepted in connection with their SLFRF award and all other 

applicable executive orders, federal statutes, and regulations in carrying out their SLFRF 

award. Recipients must also provide for such compliance by other parties in any 

agreements it enters into with other parties relating to the award. The award terms listed 

specific statutes and regulations that apply to the award, but the award terms made clear 

that these lists were not exclusive. Particularly in the case of the SLFRF, it’s not possible 

to enumerate the full list of federal statutes, regulations and executive orders that may be 

applicable to the award given that the range of eligible uses of funds is so broad, including 

the provision of government services.

13.11. How does Treasury treat program income?

Per 2 CFR 200.307, Treasury is specifying here that recipients may add program income to 

the Federal award. Any program income generated from SLFRF funds must be used for the 

purposes and under the conditions of the Federal award.

Program income includes but is not limited to income from fees for services performed, the 

use or rental of real or personal property acquired under federal awards, the sale of 

commodities or items fabricated under a federal award, license fees and royalties on 

patents and copyrights, and principal and interest on loans made with federal award funds. 

Interest earned on advances of federal funds is not program income. For more information 

on what constitutes “Program Income” please see 2 CFR 200.1.

13.12. Does COVID-19 and the national emergency qualify as "exigency" as a special 

circumstance under 2 CRF 200.320 (c) in which a noncompetitive procurement can 

be used? If so, may a contract utilizing this special circumstance have a term that 

extends beyond the national emergency? For example, may the County execute a 

contract (without going through a competitive solicitation) immediately with a 

contractor to provide services with a term through the end of 2024, relying upon this 

special circumstance?

The COVID-19 public health emergency does not itself qualify as a “public exigency or 

emergency” under 2 CFR 200.320(c). In other words, a recipient may not justify a 

noncompetitive procurement simply on the basis that the procurement is conducted during 

the public health emergency or that the project is in response to the public health 

emergency.
61

Instead, the recipient must make its own assessment as to whether in the case of a 

particular project there is a public exigency or emergency that “will not permit a delay 

resulting from publicizing a competitive solicitation.” 

13.13. What compliance and reporting requirements apply to subrecipients and 

beneficiaries? 

As detailed in Treasury’s Compliance and Reporting Guidance (pg. 11), subrecipients are 

required to comply with all of the restrictions applicable to recipients, including audit 

requirements under the Single Audit Act, whereas beneficiaries are not subject to these 

requirements. The distinction between subrecipients and beneficiaries is addressed in the 

supplemental information to Treasury’s 2022 final rule.6 For example, when recipients of 

SLFRF funds provide award funds to individuals or entities as a result of experiencing a

public health or negative economic impact of the pandemic, those receiving such funding 

are beneficiaries of the funds. In contrast, when recipients provide award funds to an entity 

to carry out a program in response to the public health emergency or its negative economic 

impacts, the entities receiving such funding are subrecipients. 

Treasury requires recipients to report detailed information in the Treasury reporting portal 

as part of the Project and Expenditure Report regarding subrecipients that receive 

subawards of $50,000 or more and certain beneficiaries that receive direct payments of 

$50,000 or more in SLFRF funds. Requirements for this reporting can be found in the 

Compliance and Reporting Guidance (pg. 21).

Recipients are not required to separately identify payments to specific individuals 

receiving funds as beneficiaries in the Project and Expenditure Report. Those funds must 

be reported in the aggregate as part of the “Payments to Individuals” section.

As in the case of reporting under the Coronavirus Relief Fund, information on both 

beneficiaries and subrecipients will be collected in a single form in the Project and 

Expenditure Report.

13.14. Do recipients need to report subrecipient information for the revenue loss 

eligible use category?

No. Treasury is not collecting subaward data for projects categorized under Expenditure 

Category Group 6 “Revenue Replacement.” Treasury has determined that there are no 

subawards under this eligible use category. The definition of subrecipient in the Uniform 

Guidance provides that a subaward is provided for the purpose of “carrying out” a portion 

of a federal award. Recipients’ use of revenue loss funds does not give rise to subrecipient 

relationships given that there is no federal program or purpose to carry out in the case of 

the revenue loss portion of the award. 

13.15. Which requirements of the Uniform Guidance apply to revenue loss funds? 

6 Coronavirus State and Local Fiscal Recovery Funds, 87 FR 4338, 4394.
62

Under the statute and the 2022 final rule, recipients may use SLFRF funds for the 

provision of government services up to the amount of their revenue loss due to the 

pandemic. Under the 2022 final rule, recipients may either calculate their revenue loss 

amount using a formula provided in the 2022 rule or elect up to a $10 million “standard 

allowance” of revenue loss over the life of the program. Recipients have considerable 

flexibility to use SLFRF revenue loss funds on activities to address the diverse needs of 

their communities, as discussed in #FAQ 3.2, but may not use the funds for the following 

ineligible uses:

• Offset a reduction in net tax revenue (applicable to states and territories)

• Make a deposit into a pension fund (applicable to all recipients except Tribes)

• Service debt or replenish financial reserves (e.g., “rainy day funds”) (applicable 

to all recipients)

• Satisfy settlements and judgments (applicable to all recipients)

• Fund programs, services, or capital expenditures that include a term or 

condition that undermines efforts to stop the spread of COVID-19 (applicable 

to all recipients)

In-depth descriptions of the ineligible uses can be found in the “Restrictions on Use” 

section of the Coronavirus State and Local Fiscal Recovery Funds: Overview of the 2022

Final Rule.

The SLFRF award terms and conditions provide that the requirements of the Uniform 

Guidance, 2 C.F.R. Part 200, apply to SLFRF awards other than such provisions as 

Treasury may determine are inapplicable to the award and subject to such exceptions as 

may be otherwise provided. The 2022 Compliance Supplement also provided that the 

requirements of 2 C.F.R. Part 200 are applicable unless stated otherwise. As such, 

recipients are required to follow Subparts A, B, C, and F of the Uniform Guidance for 

expenses categorized under Expenditure Category 6 “Revenue Replacement.” However, 

given the purpose and very broad scope of eligible uses of the revenue replacement 

funds, only a subset of the requirements in Subparts D and E of the Uniform Guidance

apply to recipients’ use of such funds. The applicable requirements are listed below. In 

general, these requirements provide that recipients should not deviate from their 

established practices and policies regarding the incurrence of costs, and that they should

expend and account for the funds in accordance with laws and procedures for expending 

and accounting for the recipient’s own funds.7 Recipients’ use of revenue replacement 

funds remains subject to the other applicable requirements of the SLFRF program, 

including among other things the deadlines for obligations and expenditures and the 

application of federal antidiscrimination requirements. 

Uniform Guidance Subpart D and E Requirements Applicable to Revenue Loss Funds 

Used for the Provision of Government Services

7 Cf. 2 CFR 200.302(a), 2 CFR 200.404(e). 
63

Subpart D Post Federal Award Requirements

• 200.300 Statutory and national policy requirements.

• 200.302 Financial management. 

• 200.303 Internal controls.

• 200.328 Financial reporting.

• 200.329 Monitoring and reporting program performance.

• Record Retention and Access (2 C.F.R. 200.334 – 200.338)

o 200.334 Retention requirements for records.

o 200.335 Requests for transfer of records.

o 200.336 Methods for collection, transmission, and storage of information.

o 200.337 Access to records.

o 200.338 Restrictions on public access to records.

• Remedies for Noncompliance (2 C.F.R. 200.339 – 200.343)

Note: These sections will apply to Treasury’s administration of the funds. Because 

the revenue loss eligible use category does not give rise to subawards, as 

discussed in FAQ 13.14, recipients will not be in a position to apply these 

provisions with respect to subrecipient relationships. 

o 200.339 Remedies for noncompliance.

o 200.340 Termination. 

o 200.341 Notification of termination requirement. 

o 200.342 Opportunities to object, hearings, and appeals.

o 200.343 Effects of suspension and termination.

• 200.344 Closeout.

Note: This section will apply to Treasury’s administration of the funds. Because 

the revenue loss eligible use category does not give rise to subawards, as 

discussed in FAQ 13.14, recipients will not be in a position to apply this provision 

with respect to subrecipient relationships. 

• 200.345 Post-closeout adjustments and continuing responsibilities.

Note: This section will apply to Treasury’s administration of the funds. Because 

the revenue loss eligible use category does not give rise to subawards, as 

discussed in FAQ 13.14, recipients will not be in a position to apply this provision 

with respect to subrecipient relationships.

• 200.346 Collection of amounts due. 

The program income requirements of 2 CFR 200.307 do not apply under revenue loss 

eligible use category. As such, recipients may maintain program income, which will not 

be considered an addition to the federal award.

Consistent with the Uniform Guidance, if SLFRF is to be used to cover a cost incurred by 

a recipient, the cost must be one that is allowable. In determining whether a cost is 

allowable for purposes of funds used under the revenue loss eligible use category, only 

the following factors and requirements apply:

Subpart E – Cost Principles

• 200.400(a) - (c), and (e) Policy guide. 

• 200.403(a), (c), (d), (g), and (h) Factors affecting allowability of costs. 
64

• 200.404(e) Reasonable costs. 

13.16. What are the use and disposition requirements for assets purchased with 

SLFRF funds?

SLFRF funds may be used to acquire real and personal property, supplies, and equipment. 

For example, a recipient may use SLFRF funds to, among other things, construct or 

renovate affordable housing, childcare facilities, schools, and hospitals under the eligible 

use category for responding to the public health emergency or its negative economic 

impacts pursuant to Treasury’s 2022 final rule, 31 CFR 35.6(b), and to make investments 

in water, sewer, and broadband infrastructure pursuant to the 2022 final rule, 31 CFR 

35.6(e).

Except for property, supplies, or equipment acquired using revenue loss funds, recipients 

must follow the applicable provisions of the Uniform Guidance regarding property 

standards (2 CFR 200.310 – 200.316), subject to the requirements set out in this FAQ.

For the following eligible use categories – public health and negative economic impacts, 

water, sewer, and broadband infrastructure, emergency relief from natural disasters, and 

Title I projects – a recipient may, during the period of performance, use property, supplies, 

or equipment purchased or improved with SLFRF funds for a purpose other than the 

purpose for which it was purchased or improved if such other purpose is also consistent 

with the eligible use requirements. If a recipient changes the use of an asset to an ineligible 

use or sells the asset prior to the end of the period of performance, the recipient must 

follow the disposition procedures set out in the Uniform Guidance. See 2 CFR 200.311, 

200.313, 200.314, and 200.315. In addition, in the case of changes during the period of 

performance to the use of property, supplies or equipment acquired as part of a Title I 

project, the recipient would also have to ensure that the new use of the property, supplies 

or equipment complies with Treasury’s guidance regarding NEPA, NHPA and other 

environmental requirements.

For the Surface Transportation projects eligible use category, recipients using SLFRF 

funds for a Pathway One or Pathway Three project must follow the use and disposition 

requirements provided by the U.S. Department of Transportation pursuant to its

administration of the project. For example, for rights-of-way involving title 23 assistance, 

the requirements of 23 CFR part 710 apply.

For projects under the streamlined framework under Pathway Two, recipients may use 

property, supplies, or equipment purchased or improved with SLFRF funds for a purpose 

other than the purpose for which it was purchased or improved, if such other purpose is 

consistent with the parameters of the streamlined framework under Pathway Two, as 

provided in the 2023 interim final rule. If a recipient changes the use of an asset to an 

ineligible use or sells the asset prior to the end of the period of performance, the recipient 

must follow the disposition procedures set out in the Uniform Guidance.

After the end of the period of performance, the property, supplies, or equipment purchased 
65

or improved with SLFRF funds must be used consistent with the purpose for which it was 

purchased or improved or for any other eligible purpose in the same eligible use category 

as reported to Treasury as of the final reporting period, as set forth in the table below.

Category Use Requirements

Public Health and 

Assistance to 

Households and 

Individuals

Property, supplies, or equipment last reported as being used to 

respond to the public health impacts of the public health 

emergency, as outlined in 31 CFR 35.6(b)(3)(i), or being used for 

the provision of services to households provided in 31 CFR 

35.6(b)(3)(ii)(A), are authorized to fulfill any eligible use of funds 

provided in these subparagraphs of the 2022 final rule.

Assistance to Small 

Businesses, 

Nonprofits, and 

Impacted Industries

Property, supplies, or equipment last reported as being used for the 

provision of services to small businesses, nonprofits, and impacted 

industries outlined in 31 CFR 35.6(b)(3)(ii)(B)-(D) are authorized 

to fulfill any eligible use of funds outlined in the public health and 

negative economic impacts eligible use category. 

Water, Sewer, or 

Broadband 

Infrastructure

Property, supplies, or equipment last reported as being used to 

make investments in water, sewer, or broadband infrastructure 

pursuant to 31 CFR 35.6(e) are authorized to fulfill any eligible use 

of funds outlined in the water, sewer, and broadband infrastructure 

eligible use category. 

Government 

Services/Revenue 

Loss

Property, supplies, or equipment acquired with revenue loss funds 

are exempt from the use and disposition requirements of the 

Uniform Guidance, regardless of award size.

Premium Pay N/A

Emergency Relief 

from Natural 

Disasters

Property, supplies, or equipment last reported as being used to 

provide emergency relief from natural disasters, as outlined in 31 

CRF 35.6(g), are authorized to fulfill any eligible use of funds 

outlined in the emergency relief from natural disasters eligible use 

category. 

Surface 

Transportation 

projects

For Pathway One and Pathway Three, recipients should follow the 

use and disposition guidance provided by the Department of 

Transportation for the project. For projects within the streamlined 

framework of Pathway Two, property, supplies, or equipment last 

reported as being used to make investments in surface 

transportation projects that meet the parameters pursuant to 31 CFR

35.6(h)(1)(ii)(B)(2) are authorized to fulfill any project that meets 

the parameters of the streamlined framework under Pathway Two.

Title I projects Property, supplies, or equipment last reported as being used to 

provide assistance under activities eligible under the Community 

Development Block Grant (CDBG) and Indian Community 

Development Block Grant (ICDBG) programs, as outlined in 31 

CFR 35.6(h)(2), are authorized to fulfill any eligible use of funds

outlined in the Title I projects eligible use category that continues to 

satisfy the CDBG National Objectives requirement for non-Tribal 
66

recipients, and the requirements of the Primary Objective for Tribal 

recipients.

If the use of an asset shifts within the parameters of the eligible purpose according to this 

table after the period of performance, no repayment would be required. For example, 

converting a hospital to a behavioral health facility would qualify as being used for the 

eligible purpose because both expenditures respond to the public health impacts of the 

public health emergency, as outlined in 31 CFR 35.6(b)(3)(i), so reimbursement to 

Treasury would be unnecessary. 

If the use of an asset shifts outside the parameters of the eligible purpose according to this 

table after the period of performance, the recipient or subrecipient must follow the 

disposition procedures in the Uniform Guidance and SLFRF program policies. See 2 CFR 

200.311, 200.313, 200.314, and 200.315. Note that the applicability of these sections of the 

Uniform Guidance does not govern use and disposition requirements under the CDBG and 

ICDBG programs, but does apply to the use of SLFRF funds under the Title I projects 

eligible use category.

Recipients are responsible for being able to substantiate their determinations on whether 

the use of an asset is authorized and maintain a record of that determination in accordance 

with the requirements set forth in the financial assistance agreement accepted in connection 

with their award. Recipients are not required to seek or obtain the approval of Treasury 

prior to changing the use within the parameters of the authorized purpose. 

13.17. In the definition of “obligation” in the 2022 final rule, what does Treasury 

mean by “similar transactions that require payment?”

As stated in the 2022 final rule, obligation means “an order placed for property and 

services and entering into contracts, subawards, and similar transactions that require 

payment.” See 31 CFR 35.3.

As contemplated by this definition, Treasury recognizes that recipients may obligate funds 

through means other than contracts or subawards, for example in the case of payroll costs. 

In these circumstances, recipients must follow state or local law and their own established 

practices and policies regarding when they are considered to have incurred an obligation 

and how those obligations are documented. For example, a recipient may have incurred an 

obligation even though the recipient and its employee may not have entered into an 

employment contract.

On November 20, 2023, Treasury published an interim final rule to clarify the definition of 

“obligation” ((88 Fed. Reg. 80584 (Nov. 20, 2023)) (Obligation IFR). The term

“obligation” continues to mean an order placed for property and services and entry into 

contracts, subawards, and similar transactions that require payment. As discussed in the 

Obligation IFR, a recipient is also considered to have incurred an obligation by December 

31, 2024, with respect to satisfying a requirement under federal law or regulation or a 

provision of the SLFRF award terms and conditions to which the recipient becomes subject 
67

as a result of receiving or expending SLFRF funds. Recipients should reference the 

Obligation IFR and the Obligation Interim Final Rule Quick Reference Guide for more 

information. 

14. Consolidated Appropriations Act, 2023 New Eligible Uses – General 

Questions

14.1. Did Treasury’s 2023 interim final rule impact the four existing eligible uses 

provided in the American Rescue Plan?

The 2023 interim final rule implements how recipients may use SLFRF funds for the three 

new eligible uses authorized by the 2023 CAA. The four eligible uses provided in the 

American Rescue Plan and implemented in the 2022 final rule remain available to 

recipients and generally are unchanged. Accordingly, recipients may continue to use

SLFRF funds for eligible projects and activities in accordance with the 2022 final rule.

14.2. Did Treasury’s 2023 interim final rule impact how recipients may use SLFRF 

funds for the provision of government services, whether a recipient is claiming up 

to $10 million under the standard allowance or calculating revenue loss according 

to the formula? 

Recipients can continue to use SLFRF funds for the provision of government services 

under the revenue loss eligible use category in accordance with the 2022 final rule which 

provides two options for determining revenue loss. Recipients may calculate revenue loss 

according to the formula described in the 2022 final rule or claim up to $10 million in 

revenue loss, not to exceed a recipient’s total SLFRF allocation, under the standard 

allowance. The 2023 CAA amendments to the SLFRF program codified these options into 

law. Recipients may update their revenue loss determinations through the April 2025 

reporting period, as described in FAQ #3.1, so long as they use a consistent methodology 

throughout the period of performance. 

14.3. Can a recipient that used funds under the revenue loss eligible use category 

for a project that would otherwise be eligible under the new eligible use categories 

shift these costs to one of the new eligible use categories? 

Treasury’s 2023 interim final rule discusses three new eligible use categories of emergency 

relief from natural disasters, Surface Transportation projects, and Title I projects. For all 

three new eligible use categories, recipients may use SLFRF funds for costs incurred 

beginning December 29, 2022. 

Recipients that had previously used SLFRF funds under the revenue loss eligible use 

category for costs that would otherwise be eligible under the new eligible uses articulated 
68

in the 2023 interim final rule may choose to use their SLFRF funds under the new eligible 

use categories, as long as these costs meet the requirements of the 2023 interim final rule 

and were not incurred prior to December 29, 2022, and for Surface Transportation projects 

and Title I projects, the revenue loss funds did not supplant other Federal, State, territorial, 

Tribal, and local government funds, as provided in the statute and Treasury’s 2023 interim 

final rule. Recipients choosing to use their SLFRF funds under a new eligible use category

must reflect the change in their Project and Expenditure reports to be submitted to 

Treasury.

14.4. Can a recipient that is using funds under the revenue loss eligible use 

category for a project that would otherwise be eligible under the new eligible use 

categories continue to fund that project under the revenue loss eligible use 

category? 

As described in FAQ #3.2, every use that is eligible under the other eligible use categories 

is also eligible under revenue loss, because those eligible uses are also services provided by 

recipient governments. This continues to apply to the new eligible uses described in the 

2023 interim final rule. Recipients that have been using SLFRF funds under the revenue 

loss eligible use category for a project that would otherwise be eligible under one of the 

new eligible use categories, as detailed in the 2023 interim final rule, may continue to fund 

that project under the revenue loss eligible use category in accordance with the 2022 final 

rule. 

14.5. Does the supplement, not supplant provision that applies to the Surface 

Transportation projects and Title I projects eligible use categories apply to the 

other eligible use categories?

As summarized on page 9 of the Overview of the 2023 Interim Final Rule, recipients using 

SLFRF funds under the Surface Transportation projects and Title I projects eligible use 

categories must supplement, not supplant other federal, state, territorial, Tribal, and local 

funds (as applicable) otherwise available. The “supplement, not supplant” requirement 

does not apply to the emergency relief from natural disasters, public health and negative 

economic impacts, premium pay, revenue loss, and water, sewer, and broadband 

infrastructure eligible use categories. 

14.6. What are the expenditure deadlines for the SLFRF program?

Across all seven eligible use categories, recipients must obligate SLFRF funds by 

December 31, 2024. In the case of the four eligible use categories described in the 2022 

final rule (public health and negative economic impacts; premium pay; revenue loss; and 

water, sewer, and broadband infrastructure), and the new emergency relief from natural 

disasters eligible use category described in the 2023 interim final rule, recipients must 

expend funds by December 31, 2026. SLFRF funds used for a Surface Transportation
69

project or a Title I project must be expended by September 30, 2026. See pages 3, 9, and 

19 of the Overview of the 2023 Interim Final Rule. 

14.7. How does Treasury’s 2023 interim final rule impact how SLFRF funds can be 

used for non-federal match requirements? 

Recipients may use SLFRF funds for non-federal match or cost share requirements as

follows: 

As described in the 2022 final rule and in FAQ #4.6, recipients may use SLFRF funds 

under the revenue loss eligible use category to satisfy non-federal match or cost share 

requirements.

The 2023 interim final rule describes three pathways under which recipients may direct 

SLFRF funds toward the new eligible use category of Surface Transportation projects. 

Specifically, recipients may use SLFRF funds under Pathway Three to repay a TIFIA loan

or for the non-Federal cost share requirements of certain DOT programs: INFRA Grants, 

Fixed Guidance Capital Investment Grants, Mega Grants, and projects eligible for credit 

assistance under the TIFIA program. See also page 15 of the Overview of the 2023 

Interim Final Rule. 

Also as described in the 2023 interim final rule, recipients may use SLFRF funds to satisfy 

the non-federal share requirement of a federal financial assistance program in support of a 

project or activity that is eligible under the CDBG or ICDBG programs. See page 16 of the 

Overview of the 2023 Interim Final Rule. 

Otherwise, recipients may not use SLFRF funds for the non-federal match requirements of 

other federal programs, other than as specifically provided for by statute. For example, the 

emergency relief from natural disasters eligible use category does not add any new 

authority for recipients to use SLFRF funds to satisfy non-federal match requirements of 

other federal programs. 

14.8. Did Congress appropriate additional funds when it amended the SLFRF 

program and added the three new eligible uses described in the 2023 interim final 

rule?

No. Congress did not appropriate additional funds in amending the SLFRF program in the 

2023 CAA. The 2023 interim final rule implements the three new eligible uses provided in 

the 2023 CAA for how recipients may use SLFRF funds to provide emergency relief from 

natural disasters, build surface transportation infrastructure, and support community 

development.

14.9. Can a recipient amend how it previously indicated it was spending SLFRF 
70

funds in order to direct funds to the new eligible uses? 

Recipients may use their SLFRF award funds to meet the unique needs of their 

communities, including reconsideration of existing plans and changing how they plan to 

spend SLFRF funds in accordance with the eligible use categories discussed in the 2022 

final rule and the new eligible use categories described in the 2023 interim final rule. The 

obligation deadline for all seven eligible uses is December 31, 2024. Recipients should 

reference the guidance in FAQ #16.10 and be mindful that they may use SLFRF funds for 

projects under the new eligible use categories for costs incurred beginning on December 

29, 2022.

14.10. When recipients use SLFRF funds under the public health and negative 

economic impacts eligible use category, recipients must serve populations impacted 

or disproportionately impacted by the pandemic and must respond to a public 

health or negative economic impact of the pandemic. Does this standard also apply 

to the new eligible uses? 

The American Rescue Plan Act provided that among other eligible uses, recipients could 

use SLFRF funds “to respond to the public health emergency with respect to the 

Coronavirus Disease 2019 (COVID-19) or its negative economic impacts, including 

assistance to households, small businesses, and nonprofits, or aid to impacted industries 

such as tourism, travel, and hospitality.” Treasury’s 2022 final rule provides a framework 

for identifying responses to the public health and negative economic impacts of the 

pandemic, including identifying populations impacted or disproportionality impacted by 

the pandemic. In contrast, the 2023 CAA does not require that recipients respond to a 

public health or negative economic impact of the pandemic when using SLFRF funds for 

emergency relief from natural disasters, Surface Transportation projects, or Title I projects. 

As provided in both the 2022 final rule and the 2023 interim final rule, each eligible use 

category has separate and distinct standards for assessing whether a use of funds may be

eligible. Standards or restrictions pertaining to one eligible use category do not necessarily 

apply to other categories. Therefore, recipients should first determine which eligible use 

category a potential project or activity fits within, and then assess whether that potential 

use meets the eligibility standards or criteria for that category.

14.11. When will compliance and reporting guidance be updated to address the 

new eligible uses? 

Treasury released updated Compliance and Reporting Guidance that addresses the new 

eligible use categories on September 27, 2023. Recipients will be able to report on how 

they are using SLFRF funds for the new eligible uses beginning with the October reporting 

period. 

15. Emergency Relief from Natural Disasters
71

15.1. How can recipients use SLFRF funds to provide emergency relief from a 

disaster that has occurred or is expected to occur imminently? 

Recipients seeking to use SLFRF funds for projects under the emergency relief from 

natural disasters eligible use category must undertake the following two-step process:

1. Identify a natural disaster that has occurred or is expected to occur imminently, or a 

natural disaster that is threatened to occur in the future; and

2. Identify emergency relief that responds to the physical or negative economic 

impacts, or potential physical or negative economic impacts, of the identified 

natural disaster. 

The emergency relief must be related and reasonably proportional to the impact identified.

If responding to a natural disaster that has occurred or is expected to occur imminently, 

recipients must identify a natural disaster that meets Treasury’s definition of natural 

disaster (see page 4 of the Overview of the 2023 Interim Final Rule) and an emergency 

declaration or designation for the recipient’s geography and jurisdiction in the form of:

1. An emergency declaration pursuant to the Robert T. Stafford Disaster Relief and 

Emergency Assistance Act (42 U.S.C. 5121 et seq.) (Stafford Act); 

2. An emergency declaration by the Governor of a state pursuant to respective state 

law; 

3. An emergency declaration by a Tribal government; or 

4. A designation of an event of a natural disaster by the chief executive (or equivalent) 

of a recipient government, as long as the chief executive documents that the event 

satisfies the definition of natural disaster provided in the 2023 interim final rule.

A recipient may work to identify eligible emergency relief that may be referenced in the 

non-exhaustive list of eligible emergency relief set forth in the 2023 interim final rule, such 

as temporary housing, food assistance, and emergency protective measures (see pages 5-6 

of the Overview of the 2023 Interim Final Rule). Recipients may also identify other 

eligible emergency relief needed to save lives and protect property and public health and 

safety that is related and reasonably proportional to the physical or negative economic 

impacts of a natural disaster that has occurred or is expected to occur imminently. 

15.2. How can recipients use SLFRF funds for preventative measures to lessen or 

avert the threat of catastrophe? 

As discussed in FAQ #15.1, recipients seeking to use SLFRF funds for projects under the 

emergency relief from natural disasters eligible use category must undertake the following 

two-step process:

1. Identify a natural disaster that has occurred or is expected to occur imminently, or a 

natural disaster that is threatened to occur in the future; and
72

2. Identify emergency relief that responds to the physical or negative economic 

impacts, or potential physical or negative economic impacts, of the natural disaster. 

The emergency relief must be related and reasonably proportional to the impact 

identified.

If providing assistance to lessen or avert the threat of a future natural disaster, recipients 

must document evidence of historical patterns or predictions of natural disasters that would 

reasonably demonstrate the likelihood of future occurrence of a natural disaster in its 

community that also meet the definition of natural disaster provided in the 2023 interim 

final rule (see page 4 of Overview of the 2023 Interim Final Rule and FAQ #15.7 for the 

definition of a natural disaster). For example, a recipient could utilize FEMA’s National 

Risk Index to establish the likelihood of a future hurricane, or a Tribal government could 

cite Indigenous Traditional Ecological Knowledge to determine future risks. A recipient

must use this evidence to support its determination that mitigation activities would be 

related and reasonably proportional to the threat of a natural disaster. 

As summarized on page 6 of the Overview of the 2023 Interim Final Rule, mitigation 

activities may be stand-alone projects that reduce or eliminate the potential impacts of the 

threat of natural disaster and may also be incorporated into repair or reconstruction projects 

that address the impacts of a natural disaster.

As summarized on page 7 of the Overview of the 2023 Interim Final Rule, recipients, 

except for Tribal governments, pursuing mitigation activities with total expected capital 

expenditures of $1 million or greater must complete and meet the substantive requirements 

of a written justification for the capital expenditures in their project. The written 

justification must include a description of emergency relief to be provided and potential 

impact to be addressed, an explanation of why a capital expenditure is appropriate, and a 

comparison of the proposed capital expenditure against alternative capital expenditures. 

More information on the requirements of the written justification can be found in the 2023

interim final rule. 

15.3. If a use of funds is not explicitly included in the non-exhaustive list of 

emergency relief from natural disasters in the 2023 interim final rule, does that 

mean it is prohibited?

No. The 2023 interim final rule provides a non-exhaustive list of emergency relief from 

natural disasters. In this list, Treasury references other federal programs as examples, such 

as Category B of FEMA’s Public Assistance program for recipients seeking to use SLFRF 

funds to provide emergency protective measures and FEMA’s Hazard Mitigation 

Assistance Guidance for recipients seeking to use SLFRF funds for eligible mitigation 

activities. Recipients also have broad flexibility to first identify a natural disaster and then 

identify emergency relief that responds to the natural disaster’s physical or negative 

economic impacts, as described in the 2023 interim final rule. All emergency relief must be 
73

related and reasonably proportional to the physical or negative economic impacts of a 

natural disaster that has occurred or is expected to occur imminently, or to the potential 

physical or negative economic impacts of a natural disaster that is threatened to occur in 

the future. 

As an example, in the 2023 interim final rule, Treasury did not specifically mention the 

repair or installation of tornado sirens in the non-exhaustive list of emergency relief. 

However, a recipient could identify the repair or installation of tornado sirens as eligible 

emergency relief using the framework described on pages 64990-64991 of the 2023 

interim final rule, the Overview of the 2023 Interim Final Rule, and in FAQs 15.1 and 

15.2. If the recipient experienced a declared or designated natural disaster that damaged a 

tornado siren, the recipient could use its SLFRF award funds to make repairs to the tornado 

siren. Further, if the recipient had documented evidence of historical patterns or predictions 

of tornadoes that would reasonably demonstrate the likelihood of future occurrence of a 

tornado in its community, it could determine that using SLFRF funds to install a tornado 

siren was a related and reasonably proportional mitigation activity.

15.4. How can a recipient provide cash assistance to households as emergency relief 

from natural disasters? 

The 2023 interim final rule provides a non-exhaustive list of emergency relief from natural 

disasters that includes financial assistance for lost wages, cash assistance for uninsured or 

underinsured disaster-caused expenses, and cash assistance for low-income households. 

Recipients also have broad flexibility to identify a natural disaster that has a declaration or 

designation as described in the 2023 interim final rule and then identify emergency relief 

that responds to the natural disaster’s physical or negative economic impacts, which could 

include identifying other forms of cash assistance. All emergency relief must be related 

and reasonably proportional to the physical or negative economic impacts of a natural 

disaster that has occurred or is expected to occur imminently, or to the potential physical or 

negative economic impacts of a natural disaster that is threatened to occur in the future.

15.5. What is the prohibition on duplication of benefits?

In addition to adherence to relevant Uniform Guidance cost principles provisions, specific 

requirements regarding duplication of benefits apply if a recipient uses federal funds to 

provide assistance with respect to losses suffered as a result of a major disaster or 

emergency declared under the Stafford Act (referred to as “disaster losses” in the 

Overview to the 2023 Interim Final Rule). Accordingly, if a recipient uses SLFRF funds 

under the emergency relief from natural disasters eligible use category to cover a disaster 

loss, the Stafford Act’s prohibition on duplication of benefits applies, that is, the recipient 

may not provide financial assistance to a person, business concern, or other entity with 

respect to disaster losses for which the beneficiary will receive financial assistance under 

any other program or from insurance or any other source. The recipient may provide 
74

assistance with respect to disaster losses to a person, business concern, or other entity that 

is or may be entitled to receive assistance for those losses from another source, if such 

person, business concern, or other entity has not received the other benefits by the time of 

application for SLFRF funds and the person, business concern, or other entity agrees to 

repay any duplicative assistance to the SLFRF recipient. Additionally, the recipient may 

use SLFRF funds to provide assistance for any portion of the disaster losses not covered by 

other benefits. 

Treasury recommends that recipients review FEMA’s guidance located at 44 CFR 

206.191, which describes a “delivery sequence,” or order in which disaster relief agencies 

and organizations provide assistance for disaster losses. As discussed on page 64992 of the 

2023 interim final rule, recipients must treat SLFRF funds as last in the delivery sequence, 

unless the recipient, in consultation with the appropriate FEMA Regional Administrator or 

state disaster-assistance administrator, determines that another sequence is appropriate. 

Recipients also must notify subrecipients and contractors that, when providing assistance 

in response to a Stafford Act declaration, they are responsible for ensuring that 

beneficiaries disclose any other assistance received for the same disaster losses prior to 

receiving assistance with SLFRF funds.

15.6. Does the prohibition on duplication of benefits that applies to the emergency 

relief from natural disasters eligible use category apply to other SLFRF eligible use 

categories? 

As provided on page 64991 of the 2023 interim final rule, recipients generally may not use

federal financial assistance to cover a cost that the recipient is covering with another 

federal award, by insurance, or from another source, and subrecipients are bound by this

same prohibition as recipients. See e.g., the definition of “improper payment” in the 

Uniform Guidance at 2 CFR 200.1 and factor affecting allowability of costs at 2 CFR 

200.403. 

However, specific requirements apply if a recipient uses federal funds to provide 

assistance with respect to losses suffered as a result of a major disaster or emergency 

declared under the Stafford Act (referred to as “disaster losses” in the Overview to the 

2023 Interim Final Rule), in addition to relevant Uniform Guidance cost principles 

requirements.

Accordingly, the Stafford Act’s duplication of benefits requirements applies to recipients 

using SLFRF funds to provide emergency relief from a natural disaster with a Stafford Act 

declaration. That is, recipients may not provide financial assistance to a person, business 

concern, or other entity with respect to disaster losses for which such beneficiary will 

receive financial assistance under any other program or from insurance or any other source. 

A recipient may provide assistance with respect to disaster losses to a person, business 

concern, or other entity that is or may be entitled to receive assistance for those losses from 
75

another source, if such person, business concern, or other entity has not received the other 

benefits by the time of application for SLFRF funds and the person, business concern, or 

other entity agrees to repay any duplicative assistance to the SLFRF recipient. Recipients 

may also use SLFRF funds to provide assistance for any portion of disaster losses not 

covered by other benefits. To ensure compliance with the Stafford Act’s requirements, 

SLFRF recipients are advised to review the Federal Emergency Management Agency’s 

(FEMA) guidance located at 44 CFR 206.191. See also pages 64991-64992 of the 2023

interim final rule.

15.7. Are all disasters declared as a state of emergency or that receive a Stafford 

Act declaration, such as the COVID-19 pandemic, considered a natural disaster 

under the 2023 interim final rule?

For purposes of the SLFRF program, the 2023 interim final rule defines a natural disaster 

as a hurricane, tornado, storm, flood, high water, wind-driven water, tidal wave, tsunami, 

earthquake, volcanic eruption, landslide, mudslide, snowstorm, drought, or fire, in each 

case attributable to natural causes, that causes or may cause substantial damage, injury, or 

imminent threat to civilian property or persons. A natural disaster may also include another 

type of natural catastrophe, attributable to natural causes, that causes or may cause 

substantial damage, injury, or imminent threat to civilian property or persons. See page 

64990 of the 2023 interim final rule.

After the recipient has identified a natural disaster that meets the definition set out above, 

the natural disaster, having occurred or imminent, must be the subject of an emergency 

declaration or designation relevant to the recipient’s geography and jurisdiction in the form 

of one of the following:

1. An emergency declaration pursuant to the Robert T. Stafford Disaster Relief and 

Emergency Assistance Act;

2. An emergency declaration by the Governor of a state pursuant to respective state law; 

3. An emergency declaration by a Tribal government; or

4. A designation of an event of a natural disaster by the chief executive (or equivalent) of 

a recipient government that documents that the event satisfies the definition of natural 

disaster provided on page 64990 of the 2023 interim final rule. 

Recipients only need one type of declaration or designation from the list above, and not all 

disasters with an emergency declaration will meet the definition of a natural disaster above.

For more information, please see pages 64990-64991 of the interim final rule. 

15.8. Can recipients use SLFRF funds for the non-federal match or cost share 

requirements associated with other federal financial assistance, such as FEMA 

grants?
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With respect to the emergency relief from natural disasters eligible use category, the 2023 

CAA does not add new authority for recipients to use SLFRF funds to satisfy non-federal 

match requirements of other federal programs. However, as described in the 2022 final 

rule, recipients may use SLFRF funds for a project under the revenue loss eligible use 

category to satisfy non-federal match requirements. In addition, the new Surface 

Transportation projects and Title I projects eligible use categories, discussed in FAQ 

#14.7, provide recipients the ability to use funds to satisfy non-federal cost share 

requirements in certain instances. Please refer to the 2022 final rule and 2023 interim final 

rule for more information.

15.9. If a recipient uses SLFRF funds to provide emergency relief from a natural 

disaster, how will this impact other federal funding, such as funds received from 

FEMA?

Subject to the prohibition on duplication of benefits explained in the 2023 interim final 

rule and in FAQ #15.5, a recipient’s use of SLFRF funds to provide emergency relief from 

a natural disaster will not impact other sources of federal funding. The 2023 interim final 

rule provides significant flexibility for recipients to use SLFRF funds to provide 

emergency relief from the widespread physical and negative economic impacts of natural 

disasters. See pages 5-6 of the Overview of the 2023 Interim Final Rule for a nonexhaustive list of eligible emergency relief. 

Explained in FAQ #15.5, in addition to adherence to relevant Uniform Guidance cost 

principles provisions, recipients are required to follow the “delivery sequence,” or order in 

which disaster relief agencies and organizations provide assistance pursuant to FEMA’s 

guidance located at 44 CFR 206.191. Detailed in the 2023 interim final rule, SLFRF funds 

must be used last in the delivery sequence unless the recipient, in consultation with the 

appropriate Regional Administrator of FEMA or state disaster-assistance administrator, 

determines that another sequence is appropriate. 

15.10. If a recipient experiences a natural disaster, could the recipient use SLFRF 

funds to repair damage to public infrastructure caused by the natural disaster?

As discussed in FAQ #15.1, recipients seeking to use SLFRF funds to provide the 

emergency relief from the physical or economic impacts of a natural disaster must 

undertake the following two-step process:

1. Identify a natural disaster that has occurred or is expected to occur imminently, or a 

natural disaster that is threatened to occur in the future.

2. Identify emergency relief that responds to the physical or negative economic 

impacts, or potential physical or negative economic impacts, of the natural disaster. 

The emergency relief must be related and reasonably proportional to the impact 

identified.
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On pages 5-6 of the Overview of the 2023 Interim Final Rule, Treasury provided a nonexhaustive list of eligible uses to address immediate needs in connection with a declared 

or designated natural disaster, , including public infrastructure repairs to roads, bridges, 

and utilities damaged by a natural disaster. In addition, recipients may incorporate 

mitigation activities into the project as part of restoring the public infrastructure damaged 

by the natural disaster, and making it more resilient to future natural disasters. See page 

64993 of the 2023 interim final rule. 

15.11. If a disaster is expected to occur imminently (i.e., the hurricane is expected 

to land in a few days), but is not declared by the Governor or President, are the 

expenses that are incurred eligible under the emergency relief from natural 

disasters eligible use category?

To provide emergency relief before, during, or after a natural disaster that has already 

occurred or is expected to occur imminently, the recipient should first identify how the 

disaster meets the definition of a natural disaster described in the 2023 interim final rule 

and in FAQ #15.7. The natural disaster that has occurred or is expected to occur

imminently must be, or have been, the subject of an emergency declaration or designation 

applicable to the recipient’s geography and jurisdiction. If an emergency declaration 

pursuant to the Stafford Act, or an emergency declaration by the Governor of a state or a 

Tribal government is not available, the 2023 interim final rule provides a path for 

recipients to satisfy this requirement through the designation of an event as a natural 

disaster by the chief executive (or equivalent) of the recipient government, provided that 

the chief executive documents that the event meets the definition of natural disaster 

provided above. Recipients should maintain documentation consistent with the terms and 

conditions of the award agreement. An emergency designation by the chief executive (or 

equivalent) of the recipient government is required only in the absence of an emergency 

declaration made pursuant to the Stafford Act or made by a state or Tribal government. 

15.12. To qualify as a natural disaster under the interim final rule, does the event 

have to be the subject of all four types of declarations, including a declaration 

pursuant to the Robert T. Stafford Act?

To provide emergency relief before, during, or after a natural disaster that has already 

occurred or is expected to occur imminently, the recipient should first identify how the 

disaster meets the definition of a natural disaster. Please see page 64990 of the 2023 

interim final rule and FAQ #15.7 for the definition of a natural disaster for the purposes of 

the SLFRF program. 

The natural disaster that has occurred or is expected to occur imminently must be, or have 

been, the subject of an emergency declaration or designation applicable to the recipient’s 

geography and jurisdiction in the form of one of the following:
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1. An emergency declaration pursuant to the Robert T. Stafford Disaster Relief and 

Emergency Assistance Act;

2. An emergency declaration by the Governor of a state pursuant to respective state law; 

or

3. An emergency declaration by a Tribal government.

If one of the declarations listed in (1)-(3) above is not available, recipients may satisfy this 

requirement through the designation of an event as a natural disaster by the chief executive 

(or equivalent) of the recipient government, provided that the chief executive documents 

that the event meets the definition of a natural disaster provided in the 2023 interim final 

rule. Recipients only need one declaration or designation for the relevant natural disaster. 

15.13. If a recipient has both a declaration by the State and a Stafford Act 

declaration for the natural disaster, should the recipient report both declarations? 

If the event has a Stafford Act declaration, this declaration supersedes an emergency 

declaration made by the state or Tribal government, and an emergency designation made 

by the chief executive (or equivalent) of a recipient government. An emergency 

designation by the chief executive (or equivalent) of the recipient government is required 

only in absence of an emergency declaration made pursuant to the Stafford Act or made by 

a state or Tribal government. 

15.14. Under the definition of natural disasters, does civilian property or persons 

include government property?

Yes. The 2023 interim final rule defines natural disaster as: “a hurricane, tornado, storm, 

flood, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, 

landslide, mudslide, snowstorm, drought, or fire, in each case attributable to natural causes, 

that causes or may cause substantial damage, injury, or imminent threat to civilian property 

or persons. A natural disaster may also include another type of natural catastrophe, 

attributable to natural causes, that causes, or may cause substantial damage, injury, or 

imminent threat to civilian property or persons.” The definition of natural disaster in the 

2023 interim final rule is based on the definition of natural disaster under the Robert T. 

Stafford Disaster Relief and Emergency Assistance Act, which provides the statutory 

authority for most Federal disaster response activities, including as they pertain to Federal 

Emergency Management Agency (FEMA) assistance and programs. In this definition, 

property of a state, local or Tribal government is considered civilian property.

16. Surface Transportation and Title I Projects

16.1. How do recipients calculate the maximum amount of SLFRF funds they may 

spend on Surface Transportation and Title I projects, taken together? 
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Pursuant to the 2023 CAA, the maximum amount of SLFRF funds that a recipient may use 

for Surface Transportation projects and Title I projects, taken together, cannot exceed the 

greater of $10 million and 30% of a recipient’s SLFRF allocation. As stated on page 64997 

of the 2023 interim final rule, this limitation does not apply to SLFRF funds used for the 

other eligible uses in the SLFRF program, including funds used for the provision of 

government services under the revenue loss eligible use category. Accordingly, if a 

recipient chooses to use SLFRF funds under the revenue loss eligible use category for 

projects that would also be eligible under the Surface Transportation projects or Title I 

projects eligible use categories, that spending would not be included in the statutory cap on 

funds used for Surface Transportation projects and Title I projects described above. 

Recipients may choose to spend additional funding beyond what is available under the cap 

on funds on projects that might otherwise be eligible as Surface Transportation projects or 

Title I projects under the revenue loss eligible use category. 

The following three examples are illustrative of calculations regarding the statutory

limitation applicable to the total amount of SLFRF funds that a recipient may use for 

Surface Transportation projects and Title I projects taken together:

1. For a recipient that received $500 million in SLFRF funds, it may spend a maximum of 

$150 million, which is 30% of $500 million, on any combination of eligible Surface 

Transportation projects and Title I projects. 

2. For a recipient that received $15 million in SLFRF funds, it may spend a maximum of 

$10 million (as $10 million is greater than 30% of the recipient’s $15 million 

allocation, which is $4.5 million) on any combination of eligible Surface 

Transportation projects and Title I projects. 

3. For a recipient that received $6 million in SLFRF funds, it may spend a maximum of 

$6 million on any combination of eligible Surface Transportation projects and Title I 

projects. This recipient has its total SLFRF allocation available for Surface 

Transportation projects and Title I projects because its allocation is less than $10 

million. Note that if this recipient chose to claim $6 million in revenue loss (by 

claiming up to $10 million in revenue loss, not to exceed its allocation), it may spend 

its total allocation of $6 million under the revenue loss eligible use category toward the 

provision of government services, which may include projects that would otherwise be 

eligible under the Surface Transportation projects and Title I projects eligible use 

categories.

16.2. Are Surface Transportation projects and Title I projects subject to the DavisBacon Act requirements?

The 2023 interim final rule provides that for recipients using SLFRF funds for Surface 

Transportation projects under Pathways One, Two, and Three, the requirements of titles 

23, 40, and 49 of the U.S. Code generally apply, which include the requirements of, for 

example, 23 U.S.C. 113 and 49 U.S.C. 5333(a) and (b), that apply the Davis-Bacon 
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prevailing wage protections for highway and transit projects, respectively, receiving 

federal financial assistance.

In addition, non-Tribal recipients using SLFRF funds for Title I projects must comply with 

the prevailing wage rate requirements under the Davis-Bacon Act and other labor standards 

applied by HUD to construction work under Title I of the Housing and Community 

Development Act of 1974, in accordance with HUD regulations for Title I labor standards 

requirements set forth at 24 CFR 570.603. Such requirements do not apply to Tribal 

government recipients of SLFRF funds.

Please see FAQ #6.15 for information regarding how the Davis-Bacon Act applies to other 

eligible use categories in the SLFRF program. 

16.3. What are the obligation and expenditure deadlines for SLFRF funds under 

the Surface Transportation projects and Title I projects eligible use categories?

Across all seven eligible use categories in the SLFRF program, funds must be obligated by 

December 31, 2024. For Surface Transportation projects and Title I projects, recipients 

must expend SLFRF funds by September 30, 2026. For the other five eligible use 

categories, SLFRF funds must be expended by December 31, 2026. 

16.4. What are the 26 programs administered by the Department of 

Transportation under which recipients can use SLFRF funds for Pathway One 

projects under the Surface Transportation eligible use category? 

Under Pathway One, recipients may use SLFRF funds for projects under the following 

programs:
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• INFRA Grants 

• National Highway Performance 

Program 

• Bridge Investment Program 

• Surface Transportation Block 

Grant Program

• Highway Safety Improvement 

Program 

• Congestion Mitigation and Air 

Quality Improvement Program

• Charging and Fueling 

Infrastructure Discretionary 

Grant Program 

• Territorial and Puerto Rico 

Highway Program

• National Highway Freight 

Program

• Rural Surface Transportation 

Grant Program

• Carbon Reduction Program

• Promoting Resilient Operations 

for Transformative, Efficient, 

and Cost-Saving 

Transportation Program

• Tribal Transportation Program

• Federal Lands Transportation 

Program

• Federal Lands Access Program

• Rebuilding American 

Infrastructure with 

Sustainability and Equity Grant 

Program

• Transportation Infrastructure 

Finance and Innovation Act 

Program

• Urbanized Formula Grants

• Fixed Guideway Capital 

Investment Grant

• Formula Grants for Rural 

Areas

• State of Good Repair Grants

• Grants for Buses and Bus 

Facilities

• National Culvert Removal, 

Replacement, and Restoration 

Grant Program

• Bridge Replacement, 

Rehabilitation, Preservation, 

Protection, and Construction 

Program 

• Activities to carry out 

metropolitan transportation 

planning 

• Projects that further the 

completion of a designated 

route of the Appalachian 

Development Highway System

16.5. The 2023 interim final rule indicated that recipients may use SLFRF funds 

for Pathway One projects that are receiving funding from the Department of 

Transportation. Does this include funds awarded by a State’s Department of 

Transportation? 

Under Pathway One, recipients may use SLFRF award funds to supplement surface 

transportation projects receiving funding from the U.S. Department of Transportation or 

for projects that will receive funding from the U.S. Department of Transportation prior to 

December 31, 2024, the obligation deadline for the SLFRF program. These projects could 

include projects receiving funding from a State Department of Transportation acting as a 

pass through of funding from the U.S. Department of Transportation.
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If a recipient is seeking to use SLFRF funds for a project that is receiving funds from a 

State Department of Transportation, but the State is not acting as a pass through and no 

funds for the project are provided by the U.S. Department of Transportation, the recipient 

should review the parameters of Pathway Two’s streamlined framework, which is 

summarized on pages 12-14 of the Overview of the 2023 Interim Final Rule, to determine 

project eligibility. 

16.6. What are the parameters of the streamlined framework under Pathway Two? 

For a Surface Transportation project that is eligible under the RAISE Grant Program

pursuant to the 2023 Notice of Funding Opportunity for RAISE, under Pathway Two, a 

recipient may use SLFRF funds for a project that does not receive DOT funds and that 

meets the parameters of the streamlined framework summarized on page 12 of the

Overview of the 2023 Interim Final Rule and set out below:

1. The recipient’s contribution of SLFRF funds to the project must not exceed $10 

million; and

2. The entire project scope must be limited to the set of actions or activities deemed by 

DOT as meeting the criteria for categorical exclusion as listed under 23 CFR 

771.116(c)(1)-(22), 771.117(c)(1)-(30), and 771.118(c)(1)-(16). The recipient also 

must determine that those actions do not involve unusual circumstances, as described 

in 23 CFR 771.116(b), 771.117(b), and 771.118(b).

For these projects, recipients are not required to submit an application to, or receive 

approval from, Treasury to conduct the project. However, the requirements of titles 23, 40, 

and 49, such as design, planning, construction, operation, and maintenance requirements,

apply to projects under the Pathway Two streamlined framework (and projects outside the 

streamlined framework). For more information, see pages 12 – 13 of the Overview of the 

2023 Interim Final Rule. 

16.7. Where can recipients find the 2023 RAISE grant Notice of Funding 

Opportunity? 

Recipients can find the 2023 Notice of Funding Opportunity for the RAISE Grant Program 

on the Department of Transportation’s website at:

https://www.transportation.gov/RAISEgrants/raise-nofo.

16.8. What requirements of titles 23, 40, and 49 apply to projects under the 

streamlined framework under Pathway Two? 

On pages 65008-65011 of the 2023 interim final rule, Treasury discusses the application of 

the requirements of titles 23, 40, and 49 to surface transportation projects under Pathway 

Two’s streamlined framework. The application of these requirements to projects under 

Pathway Two’s streamlined framework is also summarized on pages 12-14 in the 
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Overview of the 2023 Interim Final Rule. Recipients using SLFRF funds for a surface 

transportation project that meets the parameters of the streamlined framework (summarized 

on page 12 of the Overview of the 2023 Interim Final Rule) are not required to submit an 

application to, or receive approval from, Treasury to conduct the project.

16.9. For which programs can recipients use SLFRF funds for non-federal cost 

share requirements under Pathway Three of the Surface Transportation eligible 

use category? 

As summarized on page 15 of the Overview of the 2023 Interim Final Rule, under Pathway 

Three, recipients may use SLFRF funds to repay a TIFIA loan or to satisfy non-federal 

cost share requirements for projects eligible under the following programs: 

• INFRA Grant Program;

• Fixed Guideway Capital Investments;

• Mega Grants; and 

• Projects eligible for credit assistance under the TIFIA program. 

For additional information, see page 65011 in the 2023 interim final rule and the TIFIA 

program overview on DOT’s website at:

https://www.transportation.gov/buildamerica/financing/tifia.

16.10. How does the “supplement, not supplant” provision for Surface 

Transportation and Title I projects apply to projects that are in the process of 

being awarded federal funds from DOT or HUD? How does it apply to existing 

CDBG recipients?

Summarized on page 9 of the Overview for the 2023 Interim Final Rule, recipients using 

SLFRF funds for Surface Transportation projects and Title I projects must supplement, and 

not supplant, other federal, state, territorial, Tribal, and local government funds (as 

applicable) otherwise available for such uses. The phrase “available for such uses” means: 

1. Non-federal funds are considered “otherwise available for such uses” if they have been 

obligated for activities or projects that are eligible as part of any Surface 

Transportation project or Title I project. Identifying non-federal funds that have been 

obligated for specific uses follows the definition of “obligation” in the 2022 final rule 

(see also FAQ #13.17); and

2. Federal funds are considered “otherwise available for such uses” if a federal agency 

has committed to a particular project pursuant to an award agreement or otherwise.

In practice, this places the following two restrictions on SLFRF recipients:

1. Recipients may not de-obligate, meaning cancel, amend, renegotiate, or otherwise 

revise or abrogate a contract, subaward, or similar transaction that requires payment,
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and replace any previously obligated funds with SLFRF funds in a Surface 

Transportation or Title I project.

2. Recipients may not use SLFRF funds to replace federal or non-federal funds identified 

in a federal commitment to a particular project, such as an award agreement. 

If a recipient undertaking a Surface Transportation project is in the process of being 

awarded federal funds from DOT but has not yet entered into a formal award agreement, 

the recipient may, in consultation with DOT, adjust the funding mix for the project to 

include SLFRF funds. If a formal award agreement has been entered into with DOT, then 

SLFRF funds may be added to the project only to expand the scope of the project or to 

cover unexpected costs. Under Pathway One and Pathway Three, recipients must consult 

with DOT prior to adding SLFRF funds to the project. 

For a recipient undertaking a Title I project, the first restriction (above) on de-obligating

funds and replacing those previously obligated funds with SLFRF funds applies. However, 

the second restriction to not use SLFRF funds to replace federal or non-federal funds 

identified in a federal commitment to a project does not apply to HUD funds provided to a 

Community Development Block Grant (CDBG) grantee for activities included in its annual 

plan, as HUD provides CDBG recipients flexibility to adjust those plans throughout the 

year to reflect modifications in planned spending. To clarify, the second restriction does 

apply to Tribal government recipients of Indian Community Development Block Grant 

(ICDBG) grants, as grants under the ICDBG program are commitments to particular 

projects approved by HUD.

16.11. If a recipient wants to use funds for housing and community development, 

how should it consider whether to pursue a project under the Title I projects 

eligible use category or the public health and negative economic impacts (PH-NEI) 

eligible use category? 

As stated on page 64013 of the 2023 interim final rule, in the Title I projects eligible use 

category, recipients may use SLFRF funds for any of the activities listed in section 105(a) 

of the Housing and Community Development Act of 1974 (HCDA). Many eligible Title I 

projects may also be eligible in the PH-NEI eligible use category, which is discussed in the 

2022 final rule. Recipients should consider the following when evaluating whether to 

pursue a project under the PH-NEI or Title I projects eligible use categories:

1. Under the PH-NEI eligible use category, recipients have the flexibility to use SLFRF 

funds for a range of capital expenditure projects that may include investments in 

property and facilities, such as those described in FAQs #2.14 and #4.9. The PH-NEI 

eligible use category also offers a framework for determining if other uses of funds, 

beyond those listed in the 2022 final rule, are eligible. See page 32 in the Overview to 

the 2022 Final Rule. In general, to decide whether a project may be eligible under the 

PH-NEI eligible use category, recipients should (a) identify a COVID-19 public health 
85

or economic impact on an individual or class (i.e., a group); and (b) design a program 

that responds to that impact. Responses should be related and reasonably proportional 

to the harm identified and reasonably designed to benefit those impacted. 

2. Under the Title I projects eligible use category, recipients may pursue activities listed 

under section 105(a) of the Housing and Community Development Act of 1974 (see

FAQ #16.13), which are the eligible activities under the Community Development 

Block Grant (CDBG) and Indian Community Development Block Grant (ICDBG) 

programs, subject to certain requirements and limitations. Recipients should comply 

with the related eligibility requirements and other criteria set forth at 24 CFR 570.201 –

570.209 with respect to recipients that are not Tribal governments and 24 CFR 

1003.201 – 1003.209 with respect to Tribal governments.

3. There are certain projects that are uniquely eligible under the Title I projects eligible 

use category, such as, for example, the ability to use SLFRF funds for the non-federal 

cost share or match requirements of a federal financial assistance program in support of 

eligible activities under the CDBG and ICDBG programs. 

4. Under the PH-NEI eligible use category, there is no cap on the amount of SLFRF funds 

that may be directed toward an activity in this category. Under the Title I projects

eligible use category, recipients are limited to using the greater of $10 million or 30% 

of their total allocation towards Surface Transportation projects and Title I projects, 

taken together. 

5. The requirements of the National Environmental Policy Act (NEPA) apply to all 

projects under the Title I projects eligible use category. Please see FAQ #16.16 for 

more information. NEPA requirements do not apply to projects under the PH-NEI 

eligible use category.

6. As stated above, applicable requirements of Title I of the HCDA apply to Title I 

projects, which include the CDBG Primary Objective requirement, the Planning and 

Administrative Costs cap requirement, and the Public Services Cap requirement, and 

the Broadband Equity Access and Deployment program. The requirements of the 

CDBG National Objectives and Labor Standards apply to non-Tribal recipients. See 

pages 65015-65019 of the 2023 interim final rule. In contrast, these requirements do 

not apply to projects under the PH-NEI eligible use category, under which projects 

must serve impacted or disproportionately impacted communities. The 2022 final rule 

provides a non-exhaustive list of enumerated eligible uses to respond to pandemic 

impacts and presumes that some populations experienced pandemic impacts and are 

eligible for responsive services. The 2022 final rule also provides a framework for 

determining if non-enumerated uses or populations may be eligible under the PH-NEI

eligible use category.

16.12. If a recipient is using its SLFRF funds for the non-federal match 

requirement associated with a CDBG grant award under the revenue loss eligible 

use category, does the guidance provided in the 2023 interim final rule relating to 

the Title I projects eligible use category apply, such as the Public Services and 

Administrative Caps and the obligation and expenditure deadlines?
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As described in FAQ #14.2 and page 65020 of the 2023 interim final rule, the 2023 CAA

codified the standard allowance discussed in the 2022 final rule under the revenue loss 

eligible use category. Under this category, recipients generally may use SLFRF funds to 

meet the non-federal match requirements of other federal programs, subject to the 

limitations explained in the 2022 final rule and described in FAQ #4.6. The additional 

requirements that apply to the Title I projects eligible use category do not apply to SLFRF 

funds used under the revenue loss eligible use category. As described in the 2023 interim 

final rule and the 2022 final rule, each eligible use category has separate and distinct 

standards for assessing whether a use of funds is eligible. Standards and restrictions

applicable to one eligible use category may not apply to other categories. Therefore, 

recipients should first determine which eligible use category a potential use of funds may 

fit within, and then assess whether the potential use of funds meets the eligibility standard 

or criteria for that category.

If a recipient seeks to use SLFRF funds under the revenue loss eligible use category to 

satisfy the match or cost-share requirements for a federal grant program, it should first 

confirm with the relevant awarding agency that (1) no waiver has been granted for that 

program, (2) that no other circumstances enumerated under 2 CFR 200.306(b) of the 

Uniform Guidance would limit the use of SLFRF funds to meet the match or cost share 

requirement, and (3) that there is no other statutory or regulatory impediment to using the 

SLFRF funds for the match or cost share requirement. Please refer to the 2022 final rule 

and FAQ #4.6 for more information regarding the use of SLFRF funds under the revenue 

loss eligible use category to satisfy non-federal match requirements. 

16.13. What are the eligible activities under the Title I projects eligible use 

category? 

In the Title I projects eligible use category, recipients may use SLFRF funds for any of the 

activities listed under section 105(a) of the Housing and Community Development Act of 

1974 (42 U.S.C. 5305(a)). These activities include:

• Acquisition of real property

• Acquisition, construction, reconstruction, or installation of public works, sites, or 

other public purposes

• Code enforcement in deteriorated or deteriorating areas

• Clearance, demolition, removal, reconstruction, and rehabilitation

• Removal of barriers restricting mobility and accessibility of elderly and 

handicapped persons

• Payments to housing owners for losses of rental income for holding units for 

relocation of displaced persons

• Disposition or retention of real property

• Provision of public services
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• Payment of non-federal match or cost-share requirements of a federal financial 

assistance program in support of activities that would be eligible under the CDBG 

and ICDBG programs

• Payment of the cost of completing a project funded under title I of the Housing Act 

of 1949

• Relocation payments and assistance for displaced individuals, families, businesses, 

organizations, and farm operations

• Community development plan or policy-planning-management capacity 

development

• Payment of reasonable administrative costs related to establishing and 

administering federally approved enterprise zones, administering the HOME 

program, or planning and executing community development and housing activities. 

• Provision of assistance for activities carried out by public or private nonprofit 

entities

• Assistance to carry out a neighborhood revitalization or community economic 

development or energy conservation project, or for development of shared housing 

opportunities 

• Development of energy use strategies

• Assistance to private, for-profit entities to carry out economic development projects

• Rehabilitation or development of housing assisted under 42 U.S.C. 1437

• Technical assistance to public or nonprofit entities to increase their capacity to carry 

out neighborhood revitalization or economic development activities

• Housing services

• Assistance to institutions of higher education

• Assistance to public and private organizations, agencies, and other entities to 

facilitate economic development

• Activities necessary to make essential repairs and to pay operating expenses to 

maintain habitability of housing units acquired through tax foreclosure proceedings

• Direct assistance to facilitate and expand homeownership

• Construction or improvement of tornado-safe-shelters and assistance to nonprofit 

and for-profit entities for such construction or improvement

• Lead-based paint hazard evaluation and reduction

When carrying out these activities, recipients should comply with the related eligibility 

requirements set forth at 24 CFR 570.201 – 570.209 with respect to recipients that are not 

Tribal governments and 24 CFR 1003.201 – 1003.209 with respect to Tribal governments. 

Recipients may refer to additional HUD guidance for further information about the projects 

eligible under the CDBG program, including guidance about complying with the national 

objectives and other program requirements.

16.14. If a recipient is using SLFRF funds under the Title I projects eligible use 

category for dan activity that is a NEPA exempt or categorically excluded, not 

subject to 24 CFR 58.5 activity, does the recipient need to document that 
88

determination?

Yes. To claim an activity or project as exempt pursuant to 24 CFR 58.34(a), recipients 

must document in writing their determination that the activity or project is exempt and 

meets the conditions specified for such exemption. For categorically excluded projects, 

recipients are required to maintain a well-organized written record of the process and 

determinations, including those related to the evaluation of whether the project presents 

extraordinary circumstances, made with respect to the categorical exclusion, which HUD 

refers to as an Environmental Review Record. Treasury will provide additional 

information on the Environmental Review Record requirements. For more information, see 

pages 65019-65020 of the 2023 interim final rule. 

16.15. How do I know if a project funded with SLFRF funds requires preapproval?

Treasury is not pre-approving uses of SLFRF funds under the eligible use categories set 

out in the 2022 final rule and the emergency relief from natural disasters eligible use 

category described in the 2023 interim final rule. Under the Surface Transportation 

projects and Title I projects eligible use categories, federal agency approval is required 

before recipients may use SLFRF funds for certain projects.

For Surface Transportation projects:

• If a recipient is using SLFRF funds for a Surface Transportation project under 

Pathway One or Pathway Three described in the 2023 interim final rule, the 

recipient must consult with DOT, but not Treasury, prior to using SLFRF funds for 

the project. 

• If a recipient is using SLFRF funds for a Surface Transportation project that meets 

the criteria for the streamlined framework under Pathway Two described in the 

2023 interim final rule, the project does not require Treasury’s pre-approval. 

Additionally, Pathway Two projects do not include funding from DOT, and 

therefore, do not require pre-approval from DOT. 

• Recipients that would like to use SLFRF funds for a Surface Transportation project 

under Pathway Two outside the parameters of the streamlined framework must 

submit a notice of intent to Treasury at NOI-SLFRF@treasury.gov. The notice of 

intent was due 30 calendar days after the end of the IFR comment period, by

December 20, 2023. Treasury will evaluate the projects included in these notices of 

intent, along with comments received on the 2023 interim final rule, to design and 

implement the framework for approving these types of projects. See page 65008 of

the 2023 interim final rule for information about the content to include in the notice 

of intent.

For Title I projects:
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• Recipients must submit a project-level environmental review certification to 

Treasury and receive Treasury’s approval prior to using SLFRF funds for projects 

under the Title I projects eligible use category, unless the project meets at least one 

of the criteria set out below. Recipients are not required to submit certifications or 

receive Treasury’s approval and may begin using their SLFRF funds right away for 

Title I projects that are:

▪ Exempt activities as contemplated by 24 CFR 58.34(a); or

▪ Categorically excluded activities not subject to 24 CFR 58.5 as 

contemplated by 24 CFR 58.35(b), provided that the circumstances 

described in 24 CFR 58.35(c) are not present. 

• Projects under the Title I eligible use category do not require approval from HUD.

16.16. How does NEPA apply to Surface Transportation projects and Title I 

projects? 

Surface Transportation projects:

• Regarding use of SLFRF funds for a Surface Transportation project under Pathway 

One or Pathway Three, as described in the 2023 interim final rule, recipients must 

consult with DOT regarding NEPA requirements for their project. Generally, the 

statutory requirements that normally apply when carrying out a Surface 

Transportation project funded by DOT will continue to apply to one that includes 

SLFRF funds.

• Please note that even where NEPA has been determined to not be applicable, the 

recipient may still need to comply with other environmental requirements, such as 

the Endangered Species Act and Clean Water Act.

• Regarding use of SLFRF funds for a Surface Transportation project under the 

streamlined framework of Pathway Two, recipients are not required to conduct 

NEPA environmental reviews. However, for a Surface Transportation project to be 

eligible under the streamlined framework of Pathway Two, the entire project scope 

must be limited to the set of actions or activities identified by DOT as meeting the 

criteria for categorical exclusion listed under 23 CFR 771.116(c)(1)-(22), 

771.117(c)(1)-(30), and 771.118(c)(1)-(16). The recipient also must determine that

those actions do not involve unusual circumstances, as described in 23 CFR 

771.116(b), 771.117(b), and 771.118(b).

Projects supported with SLFRF funds may still be subject to NEPA review and 

other environmental statutes if they are also funded by other federal financial 

assistance programs or have certain federal licensing or registration requirements.

In addition, a project that qualifies for the streamlined framework under Pathway 

Two may still be subject to certain limitations or prohibitions as a result of the 

application of other environmental statutes.
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For Surface Transportation projects outside of the streamlined framework under 

Pathway Two, recipients must submit a notice of intent to Treasury, as described in 

FAQ #16.15, and the requirements of NEPA and other environmental laws apply. 

The notice of intent would ideally include the status of the NEPA review, among 

other information, as listed on page 65008 of the 2023 interim final rule. 

Title I projects:

• The requirements of NEPA apply to all projects and activities under the Title I 

projects eligible use category. As described below, recipients must satisfy 

environmental review requirements differently based on the type of project they are 

pursuing. See also FAQ #16.15.

▪ For projects that are exempt activities or categorically excluded activities as 

described in the 2023 interim final rule, recipients must satisfy 

environmental review requirements by maintaining a well-organized written 

record of the recipients’ determinations that a project is an exempt or 

categorically excluded activity. For these projects, recipients do not need to 

submit any certifications or receive approval from Treasury and may begin 

using SLFRF funds for these projects right away.

▪ For projects that are not exempt activities or categorically excluded 

activities as described in the 2023 interim final rule, recipients are required 

to satisfy NEPA environmental review requirements, including submitting a 

project-level environmental review certification to Treasury and receiving 

Treasury’s approval prior to using SLFRF funds for these projects. 

• Treasury will provide additional information on the required written record and 

certification requirements.

16.17. What requirements of Title I of the Housing and Community Development 

Act of 1974 (Title I) apply to SLFRF-funded projects under the Title I projects 

eligible use category? Do HUD regulations apply to the Title I projects eligible use

category?

In accordance with the 2023 CAA, the requirements of Title I and associated regulations 

generally apply to SLFRF-funded projects under the Title I projects eligible use category. 

For each of the applicable requirements, the associated HUD regulations generally apply as 

well, including where they:

• Enumerate and clarify eligible activities under the CDBG program;

• Specify cost caps or the method to calculate costs caps; and

• Direct recipients to the applicability of other federal laws and regulations. 

On pages 65015-65020 of the 2023 interim final rule, Treasury discusses the requirements 

of Title I that apply to recipients using SLFRF funds under the Title I projects eligible use 
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category and the requirements of Title I that do not apply under this eligible use category. 

The following requirements apply to all SLFRF recipients:

• The Primary Objective: Direct at least 70% of SLFRF funds used for Title I 

projects, over the course of the SLFRF program, to projects that principally benefit 

low- and moderate-income persons in accordance with the HUD regulations set 

forth at 24 CFR 570.3 and 24 CFR 570.200(a)(3). Tribal government recipients 

must refer to the low- and moderate-income thresholds as defined by HUD at 24 

CFR. 1003.4 (or attest that project beneficiaries are receiving or are eligible to 

receive needs-based services provided by the Tribal government) and the 

requirements of 24 CFR 1003.208.

• Public Services Cap: Not more than 15% of SLFRF funds used for Title I projects 

may be spent under the “public services” category of eligible activities. The 

determination of which projects are considered “public services” shall be made in 

accordance with HUD regulations set forth at 24 CFR 570.201(e) for non-Tribal 

recipients and 24 CFR 1003.201(e) for Tribal recipients, but notwithstanding those 

provisions, the cap appliable to use of SLFRF funds for public services shall be 

15% of the total amount of SLFRF used by a recipient for Title I projects. SLFRF 

recipients, for purposes of the application of these regulations to use of SLFRF for 

Title I projects, should disregard the references in those sections to percentages of a 

grant or percentages of program income.

• Planning and Administrative Costs Cap: Not more than 20% of SLFRF funds used 

for Title I projects may be spent on planning and administrative costs. The 

determination of which costs are considered planning and administrative costs shall 

be made in accordance with HUD regulations set forth 24 CFR 570.205 and 

570.206 for non-Tribal recipients and 24 CFR 1003.205 and 24 CFR 1003.206 for 

Tribal recipients.

• Environmental Review Requirements: Satisfy NEPA environmental review 

requirements based on the procedures set forth in section 104(g) of the HCDA, as 

implemented by 24 CFR part 58, and as adapted to the SLFRF program, including 

submitting a project-level environmental review certification to Treasury and 

receiving Treasury’s approval prior to using SLFRF funds for projects that are not 

exempt activities or categorically excluded activities as described in the 2023

interim final rule, and maintaining a well-organized written record of the process 

and determinations that a project is an exempt or categorically excluded activity. 

Treasury will provide additional information on the Environmental Review Record 

and certification requirements. 

For non-Tribal recipients of SLFRF funds, the following additional requirements apply:

• CDBG National Objectives: Each project undertaken under the Title I eligible use 

category must satisfy a CDBG National Objective, in accordance with HUD 

regulations set forth at 24 CFR 570.208.
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• Labor Standards: Prevailing wage rate requirements of the Davis-Bacon Act and 

other labor standards, applied by HUD to construction work under Title I, apply to 

Title I projects in accordance with HUD regulations for Title I labor standards 

requirements set forth at 24 CFR 570.603 for non-Tribal recipients.

For a summary of Title I projects program requirements, see pages 17-18 of the 

Overview of the 2023 Interim Final Rule. 
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 Appendix