What is the American Rescue Plan Coronavirus Fiscal Recovery Fund?
The American Rescue Plan created the $350 billion Coronavirus Fiscal Recovery Fund (CFRF) for eligible state, local, territorial, and tribal governments. The CFRF is administered by the U.S. Department of Treasury and is intended to provide flexible funding to support urgent COVID-19 response efforts; replace lost public sector revenue to strengthen support for vital public services and help retain jobs; support immediate economic stabilization; and address systemic public health and economic challenges.
American Rescue Plan Coronavirus Fiscal Recovery Fund FAQs
How is the ARP CFRF being Allocated?
Here's a breakdown of allocations/eligibility:
- $195.3 billion to States and District of Columbia:
- $25.5 billion to be equally divided to provide each state a minimum of $500 million.
- $169 billion to be allocated based on the states’ share of unemployed workers over a three-month period, from Oct.-Dec. 2020.
- $130.2 billion to Local Govts:
- $65.1 billion for counties
- $45.6 billion metropolitan cities
- $19.5 billion for towns with fewer than 50,000 people
- $4.5 billion to U.S. territories
- $20 billion to tribal governments
What is the deadline for spending this funding?
Funding must be obligated by December 31, 2024. The period of performance will run until December 31, 2026.
What are the allowable uses of ARF CFRF?
Treasury has stated that within the following categories of eligible uses, recipients will have broad flexibility to decide how best to use this funding to meet the needs of their communities:
- Support public health expenditures, by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff.
- Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector
- Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic
- Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service in critical infrastructure sectors; and,
- Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.
What types of “government services” are allowable under the replacement of lost revenue category?
- maintenance or pay-go funded building of 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.
What is the timing and distribution process for the ARP CFRF?
The distribution process opened on May 10, 2021 with the release of Treasury guidance.
States that have experienced a net increase in unemployment rate of more than 2 percentage points from February 2020 to the latest available data as of the date of certification receive their full allocation of funds in a single payment; other states will receive funds in two equal tranches.
Local governments receive funds in two tranches, with 50% provided beginning in May 2021 and the balance delivered 12 months later. Non-entitlement units of government will receive funding from their States.