The U.S. Department of the Treasury is expected to issue guidance by May 10 — and possibly sooner — for the State and Local Fiscal Recovery funds included in the American Rescue Plan Act.

The $1.9 trillion federal relief package, signed into law on March 11, includes $360 billion for State and Local Government Fiscal Recovery Funds, with $7.9 billion coming to Massachusetts.

The law gives the Treasury 60 days from enactment to distribute funds directly to states, counties, territories, and Metropolitan communities (generally cities and towns with populations over 50,000). Funds for non-entitlement communities (mostly those with populations below 50,000) will be issued to the states on the same timeline and will be distributed to individual municipalities within 30 days thereafter.

Detailed guidance from the Treasury around allowable use of funds is expected to be released in conjunction with the first round of funds. The text of the ARPA identifies four eligible use categories for State and Local Government Fiscal Recovery Funds:
• Response to the public health emergency or its negative economic consequences
• Provision of premium pay to eligible workers (as designated by the local chief municipal official)
• Revenue replacement (relative to fiscal 2019 local revenue figures)
• Investments in water, sewer and broadband infrastructure

The covered period runs from March 3 of this year through Dec. 31, 2024.

Once the Treasury issues its guidance, Heath Fahle, special director for federal funds at the Executive Office for Administration and Finance, said his office will produce a document highlighting key items for Massachusetts cities and towns.

The American Rescue Plan Act will provide direct assistance to municipalities in the form of two payments, with the first half coming shortly after enactment and the second half arriving 12 months after the first. Federal assistance is being made available to all municipalities nationwide through this non-competitive grant program.

Local officials do not need to apply for funding, or outline their intended expenditures in advance, but they do need to ensure that the proper systems are in place to receive the funds, as outlined by the Treasury on April 15.

Metropolitan cities will need a valid DUNS number, which is used by the federal government to track fund expenditures. Metropolitan cities should also have an active SAM registration, which allows entities to register to do business with the federal government. Payment information, including an Entity Identification Number, contact information, and information about the municipality’s financial institution will be required as well.

Non-entitlement communities also need a valid DUNS number, but they do not need an active SAM registration, as they will receive their funds through the state.

The MMA has a dedicated website area for federal funding resources and will share information from the Treasury as soon as it becomes available.

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