ACCEPTABLE USE OF FUNDS: H.R. 1319: THE AMERICAN RESCUE PLAN ACT 2021
The ARP Act defines the following as acceptable use of funds
(a) 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;
(b) To respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the metropolitan city, nonentitlement unit of local government, or county that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work;
( c ) For the provision of government services to the extent of the reduction in revenue of such metropolitan city, nonentitlement unit of local government, or county due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year of the metropolitan city, nonentitlement unit of local government, or county prior to the emergency;
The base year against which you will measure lost revenue is the most recent full fiscal year prior to the emergency (i.e., the most recent full year budget that was set before March of 2020) (source: National League of Cities).
(d) To make necessary investments in water, sewer, or broadband infrastructure.
ADDITIONAL NOTES ON ACCEPTABLE USE
Recipients may transfer funds to a private nonprofit organization, a public benefit corporation involved in the transportation of passengers or cargo, or a special-purpose unit of State or local government (e.g., a fire district).
No recipient may use these funds for deposit into any pension fund.
Recipients may use these funds for direct stimulus payments to residents or rebates on property taxes.
Recipients may increase wages for essential workers on a temporary basis (Ex: +$10 per hour for 90 days only).
Recipients may donate funds to a non-profit that serves to benefit the community as a whole (e.g., a municipality could give the funds to organizations like “Friends of the Library” or “Friends of the Park” and those organizations can use the money to improve the library or purchase new park equipment.
FURTHER CLARIFICATION:
The National League of Cities (NLC) is working with the Treasury to obtain clarification on the language used in H.R. 1319 as it relates to Wisconsin communities. Clarification is expected to be released on a rolling basis; however, the NLC does not expect to receive the first Treasury clarification until shortly before the first payments are distributed (60 days from March 11). View the NLC’s full letter to the Treasury here.