Attachment A - CSLFRF FAQs.pdf

AS OF MAY 27, 2021 
1 
Coronavirus State and Local Fiscal Recovery Funds 
Frequently Asked Questions 
AS OF MAY 27, 2021 
This document contains answers to frequently asked questions regarding the Coronavirus State 
and Local Fiscal Recovery Funds (CSFRF / CLFRF, or Fiscal Recovery Funds).  Treasury will 
be updating this document periodically in response to questions received from stakeholders.  
Recipients and stakeholders should consult the Interim Final Rule for additional information. 
•
For overall information about the program, including information on requesting funding,
please see https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-
and-tribal-governments
•
For general questions about CSFRF / CLFRF, please email SLFRP@treasury.gov
•
Treasury is seeking comment on all aspects of the Interim Final Rule.  Stakeholders are
encouraged to submit comments electronically through the Federal eRulemaking Portal
(https://www.regulations.gov/document/TREAS-DO-2021-0008-0002) on or before July
16, 2021.  Please be advised that comments received will be part of the public record and
subject to public disclosure.  Do not disclose any information in your comment or
supporting materials that you consider confidential or inappropriate for public disclosure.
Questions added 5/27/21: 1.5, 1.6, 2.13, 2.14, 2.15, 3.9, 4.5, 4.6, 10.3, 10.4 (noted with “[5/27]”) 
1. Eligibility and Allocations
1.1. Which governments are eligible for funds? 
The following governments are eligible: 
•
States and the District of Columbia
•
Territories
•
Tribal governments
•
Counties
•
Metropolitan cities
•
Non-entitlement units, or smaller local governments
1.2. Which governments receive funds directly from Treasury? 
Treasury will distribute funds directly to each eligible state, territory, metropolitan city, 
county, or Tribal government.  Smaller local governments that are classified as non-
entitlement units will receive funds through their applicable state government.     
1.3. Are special-purpose units of government eligible to receive funds? 
Attachment A

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Special-purpose units of local government will not receive funding allocations; however, 
a state, territory, local, or Tribal government may transfer funds to a special-purpose unit 
of government.  Special-purpose districts perform specific functions in the community, 
such as fire, water, sewer or mosquito abatement districts. 
 
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 specifies that $1 billion will be allocated evenly to all eligible 
Tribal governments.  The remaining $19 billion will be distributed using an allocation 
methodology based on enrollment and employment.   
 
There will be two payments to Tribal governments.  Each Tribal government’s first 
payment will include (i) an amount in respect of the $1 billion allocation that is to be 
divided equally among eligible Tribal governments and (ii) each Tribal government’s pro 
rata share of the Enrollment Allocation.  Tribal governments will be notified of their 
allocation amount and delivery of payment 4-5 days after completing request for funds in 
the Treasury Submission Portal.  The deadline to make the initial request for funds is 
June 7, 2021. 
 
In late-May or shortly after completing the initial request for funds, Tribal governments 
will receive an email notification to re-enter the Treasury Submission Portal to confirm or 
amend their 2019 employment numbers that were submitted to the Department of the 
Treasury for the CARES Act’s Coronavirus Relief Fund.  The deadline to confirm 
employment numbers is June 21, 2021.  Treasury will calculate each Tribal government’s 
pro rata share of the Employment Allocation for those Tribal governments that confirmed 
or submitted amended employment numbers.  In late-June, Treasury will communicate to 
Tribal governments the amount of their portion of the Employment Allocation and the 
anticipated date for the second payment. 
 
1.5. My county is a unit of general local government with population under 50,000.  Will 
my county receive funds directly from Treasury? [5/27] 
 
Yes.  All counties that are units of general local government will receive funds directly 
from Treasury and should apply via the online portal.  The list of county allocations is 
available here.  
 
1.6. My local government expected to be classified as a nonentitlement unit. Instead, it 
was classified as a metropolitan city. Why? [5/27] 
 
The American Rescue Plan Act defines, for purposes of the Coronavirus Local Fiscal 
Recovery Fund (CLFRF), metropolitan cities to include those that are currently 
metropolitan cities under the Community Development Block Grant (CDBG) program 
but also those cities that relinquish or defer their status as a metropolitan city for purposes

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of the CDBG program.  This would include, by way of example, cities that are principal 
cities of their metropolitan statistical area, even if their population is less than 50,000.  In 
other words, a city that is eligible to be a metropolitan city under the CDBG program is 
eligible as a metropolitan city under the CLFRF, regardless of how that city has elected to 
participate in the CDBG program. 
 
Unofficial allocation estimates produced by other organizations may have classified 
certain local governments as nonentitlement units of local government.  However, based 
on the statutory definitions, some of these local governments should have been classified 
as metropolitan cities.  
 
 
2. Eligible Uses – Responding to the Public Health Emergency / Negative 
Economic Impacts 
 
2.1. What types of COVID-19 response, mitigation, and prevention activities are 
eligible? 
 
A broad range of services are needed to contain COVID-19 and are eligible uses, 
including vaccination programs; medical care; testing; contact tracing; support for 
isolation or quarantine; supports for vulnerable populations to access medical or public 
health services; public health surveillance (e.g., monitoring case trends, genomic 
sequencing for variants); enforcement of public health orders; public communication 
efforts; enhancement to health care capacity, including through alternative care facilities; 
purchases of personal protective equipment; support for prevention, mitigation, or other 
services in congregate living facilities (e.g., nursing homes, incarceration settings, 
homeless shelters, group living facilities) and other key settings like schools; ventilation 
improvements in congregate settings, health care settings, or other key locations; 
enhancement of public health data systems; and other public health responses.  Capital 
investments in public facilities to meet pandemic operational needs are also eligible, such 
as physical plant improvements to public hospitals and health clinics or adaptations to 
public buildings to implement COVID-19 mitigation tactics.   
 
2.2. If a use of funds was allowable under the Coronavirus Relief Fund (CRF) to 
respond to the public health emergency, may recipients presume it is also allowable 
under CSFRF/CLFRF?  
 
Generally, funding uses eligible under CRF as a response to the direct public health 
impacts of COVID-19 will continue to be eligible under CSFRF/CLFRF, with the 
following two exceptions: (1) the standard for eligibility of public health and safety 
payrolls has been updated; and (2) expenses related to the issuance of tax-anticipation 
notes are not an eligible funding use.  
 
2.3. If a use of funds is not explicitly permitted in the Interim Final Rule as a response to 
the public health emergency and its negative economic impacts, does that mean it is 
prohibited?

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The Interim Final Rule contains a non-exclusive list of programs or services that may be 
funded as responding to COVID-19 or the negative economic impacts of the COVID-19 
public health emergency, along with considerations for evaluating other potential uses of 
Fiscal Recovery Funds not explicitly listed.  The Interim Final Rule also provides 
flexibility for recipients to use Fiscal Recovery Funds for programs or services that are 
not identified on these non-exclusive lists but which meet the objectives of section 
602(c)(1)(A) or 603(c)(1)(A) by responding to the COVID-19 public health emergency 
with respect to COVID-19 or its negative economic impacts.   
 
2.4. May recipients use funds to respond to the public health emergency and its negative 
economic impacts by replenishing state unemployment funds?   
 
Consistent with the approach taken in the CRF, recipients may make deposits into the 
state account of the Unemployment Trust Fund up to the level needed to restore the pre-
pandemic balances of such account as of January 27, 2020, or to pay back advances 
received for the payment of benefits between January 27, 2020 and the date when the 
Interim Final Rule is published in the Federal Register.  
 
2.5. What types of services are eligible as responses to the negative economic impacts of 
the pandemic? 
 
Eligible uses in this category include assistance to households; small businesses and non-
profits; and aid to impacted industries. 
 
Assistance to households includes, but is not limited to:  food assistance; rent, mortgage, 
or utility assistance; counseling and legal aid to prevent eviction or homelessness; cash 
assistance; emergency assistance for burials, home repairs, weatherization, or other 
needs; internet access or digital literacy assistance; or job training to address negative 
economic or public health impacts experienced due to a worker’s occupation or level of 
training.   
 
Assistance to small business and non-profits includes, but is not limited to:   
• loans or grants to mitigate financial hardship such as declines in revenues or 
impacts of periods of business closure, for example by supporting payroll and 
benefits costs, costs to retain employees, mortgage, rent, or utilities costs, and 
other operating costs; 
• Loans, grants, or in-kind assistance to implement COVID-19 prevention or 
mitigation tactics, such as physical plant changes to enable social distancing, 
enhanced cleaning efforts, barriers or partitions, or COVID-19 vaccination, 
testing, or contact tracing programs; and 
• Technical assistance, counseling, or other services to assist with business planning 
needs 
 
2.6. May recipients use funds to respond to the public health emergency and its negative 
economic impacts by providing direct cash transfers to households?

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Yes, provided the recipient considers whether, and the extent to which, the household has 
experienced a negative economic impact from the pandemic.  Additionally, cash transfers 
must be reasonably proportional to the negative economic impact they are intended to 
address.  Cash transfers grossly in excess of the amount needed to address the negative 
economic impact identified by the recipient would not be considered to be a response to 
the COVID-19 public health emergency or its negative impacts.  In particular, when 
considering appropriate size of permissible cash transfers made in response to the 
COVID-19 public health emergency, state, local, territorial, and Tribal governments may 
consider and take guidance from the per person amounts previously provided by the 
federal government in response to the COVID crisis.   
 
2.7. May funds be used to reimburse recipients for costs incurred by state and local 
governments in responding to the public health emergency and its negative 
economic impacts prior to passage of the American Rescue Plan?  
 
Use of Fiscal Recovery Funds is generally forward looking.  The Interim Final Rule 
permits funds to be used to cover costs incurred beginning on March 3, 2021.   
 
2.8. May recipients use funds for general economic development or workforce 
development? 
 
Generally, not.  Recipients must demonstrate that funding uses directly address a negative 
economic impact of the COVID-19 public health emergency, including funds used for 
economic or workforce development.  For example, job training for unemployed workers 
may be used to address negative economic impacts of the public health emergency and be 
eligible. 
 
2.9. How can recipients use funds to assist the travel, tourism, and hospitality 
industries?  
 
Aid provided to tourism, travel, and hospitality industries should respond to the negative 
economic impacts of the pandemic.  For example, a recipient may provide aid to support 
safe reopening of businesses in the tourism, travel and hospitality industries and to 
districts that were closed during the COVID-19 public health emergency, as well as aid a 
planned expansion or upgrade of tourism, travel and hospitality facilities delayed due to 
the pandemic.   
 
 
Tribal development districts are considered the commercial centers for tribal hospitality, 
 
gaming, tourism and entertainment industries.   
 
2.10. May recipients use funds to assist impacted industries other than travel, tourism, 
and hospitality?  
 
Yes, provided that recipients consider the extent of the impact in such industries as 
compared to tourism, travel, and hospitality, the industries enumerated in the statute.  For

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example, nationwide the leisure and hospitality industry has experienced an 
approximately 17 percent decline in employment and 24 percent decline in revenue, on 
net, due to the COVID-19 public health emergency.  Recipients should also consider 
whether impacts were due to the COVID-19 pandemic, as opposed to longer-term 
economic or industrial trends unrelated to the pandemic.  
 
Recipients should maintain records to support their assessment of how businesses or 
business districts receiving assistance were affected by the negative economic impacts of 
the pandemic and how the aid provided responds to these impacts. 
 
2.11. How does the Interim Final Rule help address the disparate impact of COVID-19 on 
certain populations and geographies?   
 
In recognition of the disproportionate impacts of the COVID-19 virus on health and 
economic outcomes in low-income and Native American communities, the Interim Final 
Rule identifies a broader range of services and programs that are considered to be in 
response to the public health emergency when provided in these communities.  
Specifically, Treasury will presume that certain types of services are eligible uses when 
provided in a Qualified Census Tract (QCT), to families living in QCTs, or when these 
services are provided by Tribal governments.    
 
Recipients may also provide these services to other populations, households, or 
geographic areas disproportionately impacted by the pandemic.  In identifying these 
disproportionately-impacted communities, recipients should be able to support their 
determination for how the pandemic disproportionately impacted the populations, 
households, or geographic areas to be served. 
 
Eligible services include: 
 
• Addressing health disparities and the social determinants of health, including: 
community health workers, public benefits navigators, remediation of lead paint 
or other lead hazards, and community violence intervention programs; 
 
• Building stronger neighborhoods and communities, including: supportive housing 
and other services for individuals experiencing homelessness, development of 
affordable housing, and housing vouchers and assistance relocating to 
neighborhoods with higher levels of economic opportunity; 
 
• Addressing educational disparities exacerbated by COVID-19, including: early 
learning services, increasing resources for high-poverty school districts, 
educational services like tutoring or afterschool programs, and supports for 
students’ social, emotional, and mental health needs; and 
 
• Promoting healthy childhood environments, including: child care, home visiting 
programs for families with young children, and enhanced services for child 
welfare-involved families and foster youth.

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2.12. May recipients use funds to pay for vaccine incentive programs (e.g., cash or in-kind 
transfers, lottery programs, or other incentives for individuals who get vaccinated)? 
 
Yes.  Under the Interim Final Rule, recipients may use Coronavirus State and Local 
Fiscal Recovery Funds to respond to the COVID-19 public health emergency, including 
expenses related to COVID-19 vaccination programs.  See forthcoming 31 CFR 
35.6(b)(1)(i).  Programs that provide incentives reasonably expected to increase the 
number of people who choose to get vaccinated, or that motivate people to get vaccinated 
sooner than they otherwise would have, are an allowable use of funds so long as such 
costs are reasonably proportional to the expected public health benefit. 
 
2.13. May recipients use funds to pay “back to work incentives” (e.g., cash payments for 
newly employed workers after a certain period of time on the job)? [5/27] 
 
Yes.  Under the Interim Final Rule, recipients may use Coronavirus State and Local 
Fiscal Recovery Funds to provide assistance to unemployed workers.  See forthcoming 
31 CFR 35.6(b)(4).  This assistance can include job training or other efforts to accelerate 
rehiring and thus reduce unemployment, such as childcare assistance, assistance with 
transportation to and from a jobsite or interview, and incentives for newly employed 
workers. 
 
2.14. The Coronavirus Relief Fund (CRF) included as an eligible use: "Payroll expenses 
for public safety, public health, health care, human services, and similar employees 
whose services are substantially dedicated to mitigating or responding to the 
COVID-19 public health emergency." What has changed in CSFRF/CLFRF, and 
what type of documentation is required under CSFRF/CLFRF? [5/27] 
 
Many of the expenses authorized under the Coronavirus Relief Fund are also eligible uses 
under the CSFRF/CLFRF.  However, in the case of payroll expenses for public safety, 
public health, health care, human services, and similar employees (hereafter, public 
health and safety staff), the CSFRF/CLFRF does differ from the CRF. This change 
reflects the differences between the ARPA and CARES Act and recognizes that the 
response to the COVID-19 public health emergency has changed and will continue to 
change over time.  In particular, funds may be used for payroll and covered benefits 
expenses for public safety, public health, health care, human services, and similar 
employees, including first responders, to the extent that the employee’s time that is 
dedicated to responding to the COVID-19 public health emergency.  
 
For administrative convenience, the recipient may consider a public health and safety 
employee to be entirely devoted to mitigating or responding to the COVID-19 public 
health emergency, and therefore fully covered, if the employee, or his or her operating 
unit or division, is primarily dedicated (e.g., more than half of the employee’s time is 
dedicated) to responding to the COVID-19 public health emergency.

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Recipients may use presumptions for assessing whether an employee, division, or 
operating unit is primarily dedicated to COVID-19 response. The recipient should 
maintain records to support its assessment, such as payroll records, attestations from 
supervisors or staff, or regular work product or correspondence demonstrating work on 
the COVID-19 response. Recipients need not routinely track staff hours. Recipients 
should periodically reassess their determinations.  
 
2.15. What staff are included in “public safety, public health, health care, human 
services, and similar employees”? Would this include, for example, 911 operators, 
morgue staff, medical examiner staff, or EMS staff? [5/27] 
 
As discussed in the Interim Final Rule, funds may be used for payroll and covered 
benefits expenses for public safety, public health, health care, human services, and 
similar employees, for the portion of the employee’s time that is dedicated to responding 
to the COVID-19 public health emergency.   
 
Public safety employees would include police officers (including state police officers), 
sheriffs and deputy sheriffs, firefighters, emergency medical responders, correctional and 
detention officers, and those who directly support such employees such as dispatchers 
and supervisory personnel.  Public health employees would include employees involved 
in providing medical and other health services to patients and supervisory personnel, 
including medical staff assigned to schools, prisons, and other such institutions, and other 
support services essential for patient care (e.g., laboratory technicians, medical examiner 
or morgue staff) as well as employees of public health departments directly engaged in 
matters related to public health and related supervisory personnel.  Human services staff 
include employees providing or administering social services; public benefits; child 
welfare services; and child, elder, or family care, as well as others. 
 
 
3. Eligible Uses – Revenue Loss 
 
3.1. How is revenue defined for the purpose of this provision? 
 
The Interim Final Rule adopts a definition of “General Revenue” that is based on, but not 
identical, to the Census Bureau’s concept of “General Revenue from Own Sources” in the 
Annual Survey of State and Local Government Finances. 
 
General Revenue includes revenue from taxes, current charges, and miscellaneous 
general revenue.  It excludes refunds and other correcting transactions, proceeds from 
issuance of debt or the sale of investments, agency or private trust transactions, and 
revenue generated by utilities and insurance trusts.  General revenue also includes 
intergovernmental transfers between state and local governments, but excludes 
intergovernmental transfers from the Federal government, including Federal transfers 
made via a state to a locality pursuant to the CRF or the Fiscal Recovery Funds.

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Tribal governments may include all revenue from Tribal enterprises and gaming 
operations in the definition of General Revenue. 
 
3.2. Will revenue be calculated on an entity-wide basis or on a source-by-source basis 
(e.g. property tax, income tax, sales tax, etc.)?   
 
Recipients should calculate revenue on an entity-wide basis.  This approach minimizes 
the administrative burden for recipients, provides for greater consistency across 
recipients, and presents a more accurate representation of the net impact of the 
COVID- 19 public health emergency on a recipient’s revenue, rather than relying on 
financial reporting prepared by each recipient, which vary in methodology used and 
which generally aggregates revenue by purpose rather than by source.  
 
3.3. Does the definition of revenue include outside concessions that contract with a state 
or local government?  
 
Recipients should classify revenue sources as they would if responding to the U.S. 
Census Bureau’s Annual Survey of State and Local Government Finances.  According to 
the Census Bureau’s Government Finance and Employment Classification manual, the 
following is an example of current charges that would be included in a state or local 
government’s general revenue from own sources: “Gross revenue of facilities operated by 
a government (swimming pools, recreational marinas and piers, golf courses, skating 
rinks, museums, zoos, etc.); auxiliary facilities in public recreation areas (camping areas, 
refreshment stands, gift shops, etc.); lease or use fees from stadiums, auditoriums, and 
community and convention centers; and rentals from concessions at such facilities.” 
 
3.4. What is the time period for estimating revenue loss? Will revenue losses experienced 
prior to the passage of the Act be considered?  
 
Recipients are permitted to calculate the extent of reduction in revenue as of four points 
in time: December 31, 2020; December 31, 2021; December 31, 2022; and December 31, 
2023. This approach recognizes that some recipients may experience lagged effects of the 
pandemic on revenues.  
 
Upon receiving Fiscal Recovery Fund payments, recipients may immediately calculate 
revenue loss for the period ending December 31, 2020.   
 
3.5. What is the formula for calculating the reduction in revenue? 
 
A reduction in a recipient’s General Revenue equals:  
 
Max {[Base Year Revenue* (1+Growth Adjustment)(nt
12)] - Actual General Revenuet ; 0} 
 
Where:

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Base Year Revenue is General Revenue collected in the most recent full fiscal year prior 
to the COVD-19 public health emergency. 
 
Growth Adjustment is equal to the greater of 4.1 percent (or 0.041) and the recipient’s 
average annual revenue growth over the three full fiscal years prior to the COVID-19 
public health emergency.   
  
n equals the number of months elapsed from the end of the base year to the calculation 
date.  
 
Actual General Revenue is a recipient’s actual general revenue collected during 12-month 
period ending on each calculation date.  
 
Subscript t denotes the calculation date.  
 
3.6. Are recipients expected to demonstrate that reduction in revenue is due to the 
COVID-19 public health emergency?  
 
In the Interim Final Rule, any diminution in actual revenue calculated using the formula 
above would be presumed to have been “due to” the COVID-19 public health emergency.  
This presumption is made for administrative ease and in recognition of the broad-based 
economic damage that the pandemic has wrought. 
 
3.7. May recipients use pre-pandemic projections as a basis to estimate the reduction in 
revenue?  
 
No.  Treasury is disallowing the use of projections to ensure consistency and 
comparability across recipients and to streamline verification.  However, in estimating 
the revenue shortfall using the formula above, recipients may incorporate their average 
annual revenue growth rate in the three full fiscal years prior to the public health 
emergency.  
 
3.8. Once a recipient has identified a reduction in revenue, are there any restrictions on 
how recipients use funds up to the amount of the reduction?  
 
The Interim Final Rule gives recipients broad latitude to use funds for the provision of 
government services to the extent of reduction in revenue. Government services can 
include, but are not limited to, maintenance of infrastructure or pay-go spending for 
building new infrastructure, including roads; modernization of cybersecurity, including 
hardware, software, and protection of critical infrastructure; health services; 
environmental remediation; school or educational services; and the provision of police, 
fire, and other public safety services.   
 
However, paying interest or principal on outstanding debt, replenishing rainy day or other 
reserve funds, or paying settlements or judgments would not be considered provision of a 
government service, since these uses of funds do not entail direct provision of services to

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citizens.  This restriction on paying interest or principal on any outstanding debt 
instrument, includes, for example, short-term revenue or tax anticipation notes, or paying 
fees or issuance costs associated with the issuance of new debt.  In addition, the 
overarching restrictions on all program funds (e.g., restriction on pension deposits, 
restriction on using funds for non-federal match where barred by regulation or statute) 
would apply.  
 
3.9. How do I know if a certain type of revenue should be counted for the purpose of 
computing revenue loss? [5/27] 
 
As discussed in FAQ #3.1, the Interim Final Rule adopts a definition of “General 
Revenue” that is based on, but not identical, to the Census Bureau’s concept of “General 
Revenue from Own Sources” in the Annual Survey of State and Local Government 
Finances. 
 
Recipients should refer to the definition of “General Revenue” included in the Interim 
Final Rule.  See forthcoming 31 CFR 35.3.  If a recipient is unsure whether a particular 
revenue source is included in the Interim Final Rule’s definition of “General Revenue,” 
the recipient may consider the classification and instructions used to complete the Census 
Bureau’s Annual Survey.    
 
For example, parking fees would be classified as a Current Charge for the purpose of the 
Census Bureau’s Annual Survey, and the Interim Final Rule’s concept of “General 
Revenue” includes all Current Charges.  Therefore, parking fees would be included in the 
Interim Final Rule’s concept of “General Revenue.”    
 
The Census Bureau’s Government Finance and Employment Classification manual is 
available here.   
 
 
4. Eligible Uses – General  
 
4.1. May recipients use funds to replenish a budget stabilization fund, rainy day fund, or 
similar reserve account?  
 
No.  Funds made available to respond to the public health emergency and its negative 
economic impacts are intended to help meet pandemic response needs and provide 
immediate stabilization for households and businesses.  Contributions to rainy day funds 
and similar reserves funds would not address these needs or respond to the COVID-19 
public health emergency, but would rather be savings for future spending needs.  
Similarly, funds made available for the provision of governmental services (to the extent 
of reduction in revenue) are intended to support direct provision of services to citizens. 
Contributions to rainy day funds are not considered provision of government services, 
since such expenses do not directly relate to the provision of government services.

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4.2. May recipients use funds to invest in infrastructure other than water, sewer, and 
broadband projects (e.g. roads, public facilities)? 
 
Under 602(c)(1)(C) or 603(c)(1)(C), recipients may use funds for maintenance of 
infrastructure or pay-go spending for building of new infrastructure as part of the general 
provision of government services, to the extent of the estimated reduction in revenue due 
to the public health emergency.  
 
Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not 
be considered a response to the public health emergency and its negative economic 
impacts unless the project responds to a specific pandemic-related public health need 
(e.g., investments in facilities for the delivery of vaccines) or a specific negative 
economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract).   
 
4.3. May recipients use funds to pay interest or principal on outstanding debt? 
 
No.  Expenses related to financing, including servicing or redeeming notes, would not 
address the needs of pandemic response or its negative economic impacts. Such expenses 
would also not be considered provision of government services, as these financing 
expenses do not directly provide services or aid to citizens.   
 
This applies to paying interest or principal on any outstanding debt instrument, including, 
for example, short-term revenue or tax anticipation notes, or paying fees or issuance costs 
associated with the issuance of new debt. 
 
4.4. May recipients use funds to satisfy nonfederal matching requirements under the 
Stafford Act? May recipients use funds to satisfy nonfederal matching requirements 
generally?  
 
Fiscal Recovery Funds are subject to pre-existing limitations in other federal statutes and 
regulations and may not be used as non-federal match for other Federal programs whose 
statute or regulations bar the use of Federal funds to meet matching requirements.  For 
example, expenses for the state share of Medicaid are not an eligible use. For information 
on FEMA programs, please see here. 
 
4.5. Are governments required to submit proposed expenditures to Treasury for 
approval? [5/27] 
 
No.  Recipients are not required to submit planned expenditures for prior approval by 
Treasury.  Recipients are subject to the requirements and guidelines for eligible uses 
contained in the Interim Final Rule.   
 
4.6. How do I know if a specific use is eligible? [5/27] 
 
Fiscal Recovery Funds must be used in one of the four eligible use categories specified in 
the American Rescue Plan Act and implemented in the Interim Final Rule:

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a) To respond to the public health emergency or its negative economic impacts, 
including assistance to households, small businesses, and nonprofits, or aid to 
impacted industries such as tourism, travel, and hospitality; 
 
b) To respond to workers performing essential work during the COVID-19 public 
health emergency by providing premium pay to eligible workers; 
 
c) For the provision of government services to the extent of the reduction in revenue 
due to the COVID–19 public health emergency relative to revenues collected in 
the most recent full fiscal year prior to the emergency; and 
 
d) To make necessary investments in water, sewer, or broadband infrastructure. 
 
Recipients should consult Section II of the Interim Final Rule for additional information 
on eligible uses. For recipients evaluating potential uses under (a), the Interim Final Rule 
contains a non-exclusive list of programs or services that may be funded as responding to 
COVID-19 or the negative economic impacts of the COVID-19 public health emergency, 
along with considerations for evaluating other potential uses of Fiscal Recovery Funds 
not explicitly listed.  See Section 2 for additional discussion.  
 
For recipients evaluating potential uses under (c), the Interim Final Rule gives recipients 
broad latitude to use funds for the provision of government services to the extent of 
reduction in revenue.  See FAQ #3.8 for additional discussion.  
  
 
For recipients evaluating potential uses under (b) and (d), see Sections 5 and 6.  
 
 
5.  Eligible Uses – Premium Pay 
 
5.1. What criteria should recipients use in identifying essential workers to receive 
premium pay?  
 
Essential workers are those in critical infrastructure sectors who regularly perform in-
person work, interact with others at work, or physically handle items handled by others. 
 
Critical infrastructure sectors include healthcare, education and childcare, transportation, 
sanitation, grocery and food production, and public health and safety, among others, as 
provided in the Interim Final Rule.  Governments receiving Fiscal Recovery Funds have 
the discretion to add additional sectors to this list, so long as the sectors are considered 
critical to protect the health and well-being of residents. 
 
The Interim Final Rule emphasizes the need for recipients to prioritize premium pay for 
lower income workers.  Premium pay that would increase a worker’s total pay above 
150% of the greater of the state or county average annual wage requires specific 
justification for how it responds to the needs of these workers.

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5.2. What criteria should recipients use in identifying third-party employers to receive 
grants for the purpose of providing premium pay to essential workers?  
 
Any third-party employers of essential workers are eligible. Third-party contractors who 
employ essential workers in eligible sectors are also eligible for grants to provide 
premium pay.  Selection of third-party employers and contractors who receive grants is at 
the discretion of recipients.  
 
To ensure any grants respond to the needs of essential workers and are made in a fair and 
transparent manner, the rule imposes some additional reporting requirements for grants to 
third-party employers, including the public disclosure of grants provided.   
 
5.3. May recipients provide premium pay retroactively for work already performed?  
 
Yes.  Treasury encourages recipients to consider providing premium pay retroactively for 
work performed during the pandemic, recognizing that many essential workers have not 
yet received additional compensation for their service during the pandemic. 
 
 
6. Eligible Uses – Water, Sewer, and Broadband Infrastructure  
 
6.1. What types of water and sewer projects are eligible uses of funds?  
 
The Interim Final Rule generally aligns eligible uses of the Funds with the wide range of 
types or categories of projects that would be eligible to receive financial assistance 
through the Environmental Protection Agency’s Clean Water State Revolving Fund 
(CWSRF) or Drinking Water State Revolving Fund (DWSRF).    
 
Under the DWSRF, categories of eligible projects include: treatment, transmission and 
distribution (including lead service line replacement), source rehabilitation and 
decontamination, storage, consolidation, and new systems development. 
 
Under the CWSRF, categories of eligible projects include: construction of publicly-
owned treatment works, nonpoint source pollution management, national estuary 
program projects, decentralized wastewater treatment systems, stormwater systems, water 
conservation, efficiency, and reuse measures, watershed pilot projects, energy efficiency 
measures for publicly-owned treatment works, water reuse projects, security measures at 
publicly-owned treatment works, and technical assistance to ensure compliance with the 
Clean Water Act. 
 
As mentioned in the Interim Final Rule, eligible projects under the DWSRF and CWSRF 
support efforts to address climate change, as well as to meet cybersecurity needs to 
protect water and sewer infrastructure. Given the lifelong impacts of lead exposure for 
children, and the widespread nature of lead service lines, Treasury also encourages 
recipients to consider projects to replace lead service lines.

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6.2. May construction on eligible water, sewer, or broadband infrastructure projects 
continue past December 31, 2024, assuming funds have been obligated prior to that 
date?  
 
Yes.  Treasury is interpreting the requirement that costs be incurred by December 31, 
2024 to only require that recipients have obligated the funds by such date.  The period of 
performance will run until December 31, 2026, which will provide recipients a 
reasonable amount of time to complete projects funded with Fiscal Recovery Funds.   
 
6.3. May recipients use funds as a non-federal match for the Clean Water State 
Revolving Fund (CWSRF) or Drinking Water State Revolving Fund (DWSRF)? 
 
Recipients may not use funds as a state match for the CWSRF and DWSRF due to 
prohibitions in utilizing federal funds as a state match in the authorizing statutes and 
regulations of the CWSRF and DWSRF.  
 
6.4. Does the National Environmental Policy Act (NEPA) apply to eligible infrastructure 
projects? 
 
NEPA does not apply to Treasury’s administration of the Funds.  Projects supported with 
payments from the Funds may still be subject to NEPA review if they are also funded by 
other federal financial assistance programs.  
 
6.5. What types of broadband projects are eligible? 
 
The Interim Final Rule requires eligible projects to reliably deliver minimum speeds of 
100 Mbps download and 100 Mbps upload. In cases where it is impracticable due to 
geography, topography, or financial cost to meet those standards, projects must reliably 
deliver at least 100 Mbps download speed, at least 20 Mbps upload speed, and be 
scalable to a minimum of 100 Mbps download speed and 100 Mbps upload speed. 
 
Projects must also be designed to serve unserved or underserved households and 
businesses, defined as those that are not currently served by a wireline connection that 
reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed. 
 
6.6. For broadband investments, may recipients use funds for related programs such as 
cybersecurity or digital literacy training?  
 
Yes.  Recipients may use funds to provide assistance to households facing negative 
economic impacts due to Covid-19, including digital literacy training and other programs 
that promote access to the Internet.  Recipients may also use funds for modernization of 
cybersecurity, including hardware, software, and protection of critical infrastructure, as 
part of provision of government services up to the amount of revenue lost due to the 
public health emergency.

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7. Non-Entitlement Units (NEUs) 
 
7.1. Can states impose requirements or conditions on the transfer of funds to NEUs? 
 
As the statute requires states to make distributions based on population, states may not 
place additional conditions or requirements on distributions to NEUs, beyond those 
required by the ARPA and Treasury’s implementing regulations and guidance.   
 
For example, states may not impose stricter limitations than permitted by statute or 
Treasury regulations or guidance on an NEU’s use of Fiscal Recovery Funds based on the 
NEU’s proposed spending plan or other policies, nor permitted to offset any debt owed 
by the NEU against its payment.  Further, states may not provide funding on a 
reimbursement basis (e.g., requiring NEUs to pay for project costs up front before being 
reimbursed with Fiscal Recovery Fund payments), because this approach would not 
comport with the statutory requirement that states make distributions to NEUs within the 
statutory timeframe. 
 
7.2. Can states transfer additional funds to local governments beyond amount allocated 
to NEUs?  
 
Yes. The Interim Final Rule permits states, territories, and Tribal governments to transfer 
Fiscal Recovery Funds to other constituent units of government or private entities beyond 
those specified in the statute, as long as the transferee abides by the transferor's eligible 
use and other requirements.  Similarly, local governments are authorized to transfer 
Fiscal Recovery Funds to other constituent units of government (e.g., a county is able to 
transfer Fiscal Recovery Funds to a city, town or school district within it).  
 
7.3. What is the definition of “budget” for the purpose of the 75 percent cap on NEU 
payments, and who is responsible for enforcing this cap? 
 
States are responsible for enforcing the “75 percent cap” on NEU payments, which is a 
statutory requirement that distributions to NEUs not exceed 75 percent of the NEU’s 
most recent budget.  Treasury interprets the most recent budget as the NEU’s most recent 
annual total operating budget, including its general fund and other funds, as of January 
27, 2020.  States may rely for this determination on a certified top-line budget total from 
the NEU.  Funding amounts in excess of such cap must be returned to Treasury. 
 
7.4. May states use funds to pay for the administrative costs of allocating and 
distributing money to the NEUs? 
 
Yes.  If necessary, states may use Fiscal Recovery Funds to support the administrative 
costs of allocating and distributing money to NEUs, as disbursing these funds itself is a 
response to the public health emergency and its negative economic impacts.

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8. Ineligible Uses 
 
8.1. What is meant by a pension “deposit”? Can governments use funds for routine 
pension contributions for employees whose payroll and covered benefits are eligible 
expenses? 
 
Treasury interprets “deposit” in this context to refer to an extraordinary payment into a 
pension fund for the purpose of reducing an accrued, unfunded liability.  More 
specifically, the interim final rule does not permit this assistance to be used to make a 
payment into a pension fund if both: (1) the payment reduces a liability incurred prior to 
the start of the COVID-19 public health emergency, and (2) the payment occurs outside 
the recipient’s regular timing for making such payments.  
 
Under this interpretation, a “deposit” is distinct from a “payroll contribution,” which 
occurs when employers make payments into pension funds on regular intervals, with 
contribution amounts based on a pre-determined percentage of employees’ wages and 
salaries. In general, if an employee’s wages and salaries are an eligible use of Fiscal 
Recovery Funds, recipients may treat the employee’s covered benefits as an eligible use 
of Fiscal Recovery Funds. 
 
 
9. Reporting 
 
9.1. What records must be kept by governments receiving funds? 
 
Financial records and supporting documents related to the award must be retained for a 
period of five years after all funds have been expended or returned to Treasury, 
whichever is later.  This includes those which demonstrate the award funds were used for 
eligible purposes in accordance with the ARPA, Treasury’s regulations implementing 
those sections, and Treasury’s guidance on eligible uses of funds. 
 
9.2. What reporting will be required, and when will the first report be due? 
 
Recipients will be required to submit an interim report, quarterly project and expenditure 
reports, and annual recovery plan performance reports as specified below, regarding their 
utilization of Coronavirus State and Local Fiscal Recovery Funds.   
 
Interim reports: States (defined to include the District of Columbia), territories, 
metropolitan cities, counties, and Tribal governments will be required to submit one 
interim report. The interim report will include a recipient’s expenditures by category at 
the summary level and for states, information related to distributions to nonentitlement 
units of local government must also be included in the interim report. The interim report 
will cover activity from the date of award to July 31, 2021 and must be submitted to 
Treasury by August 31, 2021. Nonentitlement units of local government are not required 
to submit an interim report.

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Quarterly Project and Expenditure reports:  State (defined to include the District of 
Columbia), territorial, metropolitan city, county, and Tribal governments will be required 
to submit quarterly project and expenditure reports.  This report will include financial 
data, information on contracts and subawards over $50,000, types of projects funded, and 
other information regarding a recipient’s utilization of award funds.  Reports will be 
required quarterly with the exception of nonentitlement units, which will report annually.  
An interim report is due on August 31, 2021.  The reports will include the same general 
data as those submitted by recipients of the Coronavirus Relief Fund, with some 
modifications to expenditure categories and the addition of data elements related to 
specific eligible uses.  The initial quarterly Project and Expenditure report will cover two 
calendar quarters from the date of award to September 30, 2021 and must be submitted to 
Treasury by October 31, 2021. The subsequent quarterly reports will cover one calendar 
quarter and must be submitted to Treasury within 30 days after the end of each calendar 
quarter.  
 
Nonentitlement units of local government will be required to submit the project and 
expenditure report annually. The initial annual Project and Expenditure report for 
nonentitlement units of local government will cover activity from the date of award to 
September 30, 2021 and must be submitted to Treasury by October 31, 2021. The 
subsequent annual reports must be submitted to Treasury by October 31 each year. 
 
Recovery Plan Performance reports: States (defined to include the District of Columbia), 
territories, metropolitan cities, and counties with a population that exceeds 250,000 
residents will also be required to submit an annual recovery plan performance report to 
Treasury.  This report will include descriptions of the projects funded and information on 
the performance indicators and objectives of each award, helping local residents 
understand how their governments are using the substantial resources provided by 
Coronavirus State and Local Fiscal Recovery Funds program.  The initial recovery plan 
performance report will cover activity from date of award to July 31, 2021 and must be 
submitted to Treasury by August 31, 2021. Thereafter, the recovery plan performance 
reports will cover a 12-month period and recipients will be required to submit the report 
to Treasury within 30 days after the end of the 12-month period. The second Recovery 
Plan Performance report will cover the period from July 1, 2021 to June 30, 2022 and 
must be submitted to Treasury by July 31, 2022.  Each annual recovery plan performance 
report must be posted on the public-facing website of the recipient.  Local governments 
with fewer than 250,000 residents, Tribal governments, and nonentitlement units of local 
government are not required to develop a Recovery Plan Performance report.   
 
Treasury will provide further guidance and instructions on the reporting requirements for 
program at a later date. 
 
9.3. What provisions of the Uniform Guidance for grants apply to these funds? Will the 
Single Audit requirements apply? 
 
Most of the provisions of the Uniform Guidance (2 CFR Part 200) apply to this program, 
including the Cost Principles and Single Audit Act requirements.  Recipients should refer

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to the Assistance Listing for detail on the specific provisions of the Uniform Guidance 
that do not apply to this program.  The Assistance Listing will be available on 
beta.SAM.gov. 
 
 
10. Miscellaneous  
 
10.1. May governments retain assets purchased with Fiscal Recovery Funds?  If so, what 
rules apply to the proceeds of disposition or sale of such assets? 
 
Yes, if the purchase of the asset was consistent with the limitations on the eligible use of 
funds.  If such assets are disposed of prior to December 31, 2024, the proceeds would be 
subject to the restrictions on the eligible use of payments. 
 
10.2. Can recipients use funds for administrative purposes? 
 
Recipients may use funds to cover the portion of payroll and benefits of employees 
corresponding to time spent on administrative work necessary due to the COVID–19 
public health emergency and its negative economic impacts.  This includes, but is not 
limited to, costs related to disbursing payments of Fiscal Recovery Funds and managing 
new grant programs established using Fiscal Recovery Funds. 
 
10.3. Are recipients required to remit interest earned on CSFRF/CLFRF payments made 
by Treasury? [5/27] 
 
No.  CSFRF/CLFRF payments made by Treasury to states, territories, and the District of 
Columbia are not subject to the requirement of the Cash Management Improvement Act 
and Treasury’s implementing regulations at 31 CFR part 205 to remit interest to 
Treasury. CSFRF/CLFRF payments made by Treasury to local governments and Tribes 
are not subject to the requirement of 2 CFR 200.305(b)(8)–(9) to maintain balances in an 
interest-bearing account and remit payments to Treasury. 
 
10.4. Is there a deadline to apply for funds? [5/27] 
 
The Interim Final Rule requires that costs be incurred by December 31, 2024. Eligible 
recipients are encouraged to apply as soon as possible. For recipients other than Tribal 
governments, there is not a specific application deadline.  
 
Tribal governments do have deadlines to complete the application process and should 
visit www.treasury.gov/SLFRPTribal for guidance on applicable deadlines.