The U.S. Department of the Treasury has released the final rule for the American Rescue Plan funds. The nearly 500-page rule broadens the allowable uses of the funds. While the final rule does not take effect until April 1, 2022, and applies to the second reporting cycle, local governments may take advantage of the new rules now if it will benefit them.
Of note, the final rule includes a simplified lost revenue provision that gives each local government a $10 million standard allowance for lost revenues. This means that the first $10 million of your ARP dollars can be spent on nearly anything that would normally be paid for from your general fund, including roads and bridges. No townships received more than $10 million so there is wide flexibility.
In comments to Treasury in July, PSATS urged the agency to simplify rulemaking and expand the allowable uses. PSATS will provide more details next week as we digest the extensive new rulemaking and will hold a town hall on the final rule before the end of January.
In the meantime, Treasury is holding a series of webinars on the final rule:
To view the new rule and many other documents about it and the implementation of the final rule, click here.