On January 6, 2022, the U.S. Department of the Treasury issued the final rule for the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program, enacted as a part of the American Rescue Plan, which delivers $350 billion to state, local, and Tribal governments to support their response to and recovery from the COVID-19 pandemic. The SLFRF program provides financial resources to help governments:
Recipients of funds were encouraged to begin using funds under the interim final rule, which was released in May 2021. Governments have been spending these funds to address the COVID-19 pandemic and its economic effects, including by expanding access to testing, vaccines, replacement of lost revenue, making investments in broadband, water, and sewer infrastructure, and taking other steps to protect their communities--including those that are high-risk and underserved.
The final rule serves as the Treasury Department’s administrative regulation for the Coronavirus State and Local Fiscal Recovery Program. This program is the result of extensive dialogue with stakeholders, including recipient governments, and is designed to enhance the capacity of state, local, and tribal governments to meet immediate pandemic response needs and promote long-term recovery. The final rule provides state and local governments with increased flexibility to pursue a wider range of uses, as well as greater simplicity so governments can focus on responding to the crisis in their communities and maximizing the impact of their funds.
The final rule takes effect on April 1, 2022. Prior to that time, recipients may take actions and use funds in a manner consistent with the final rule, and the Treasury will not take action to enforce the interim final rule if a use of funds is consistent with the terms of the final rule, regardless of when the SLFRF funds were used. More information is available within the Treasury’s Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule.
The State and Local Fiscal Recovery Funds Program final rule provides additional clarity and broader flexibility for recipient governments, including:
The descriptions provided in this article summarize key provisions of the final rule but are non-exhaustive, do not describe all terms and conditions associated with the use of SLFRF, and do not describe all requirements that may apply to this funding.
The final rule solidified the types of reports, reporting levels, and due dates for recipients of the SLFRF. Depending on size of recipient and level of funding, reports will be required on both a quarterly and annual basis and include various information such as project descriptions and expenditures, project status, demographic information of population served, programmatic descriptions, civil rights compliance, and programmatic information. The Treasury Department Compliance and Reporting Guidance offers the following outline of the reporting requirements:
P&N’s dedicated professionals are committed to helping our clients understand and leverage the economic relief options available. Please contact us or connect with your P&N advisor to discuss your organization’s questions, concerns, and unique situation.