ARPA RESTRICTIONS

U.S. Department of Treasury rules give local governments broad leeway in spending American Rescue Plan funds, noting only a few specifically ineligible uses, such as:

■ No payments for debt service and replenishments of rainy day funds

■ No satisfaction of settlements and judgments

■ No uses that violate conflict of interest requirements or federal, state or local law

The rules generally say uses have to support ARPA’S stated purpose of addressing the COVID pandemic, particularly in marginalized communities. Under the section on capital projects, it says Treasury presumes the following projects are ineligible:

■ Construction of new correctional facilities as a response to an increase in rate of crime

■ Construction of new congregate facilities to decrease spread of COVID-19 in the facility

■ Construction of convention centers, stadiums, or other large capital projects intended for general economic development or to aid impacted industries In the section of rules regarding negative economic impacts, it says: “Note that the final rule maintains that general infrastructure projects, including roads, streets, and surface transportation infrastructure, would generally not be eligible under this eligible use category, unless the project responded to a specific pandemic public health need or a specific negative economic impact.”

“Similarly, general economic development or workforce development – activities that do not respond to negative economic impacts of the pandemic but rather seek to more generally enhance the jurisdiction’s business climate – would generally not be eligible under this eligible use category.”