State and local governments will have increased flexibility to pursue a wider range of uses under the State and Local Fiscal Adjustment Fund (SLFRF) program following a new final rule released Thursday by the Treasury which will come into force on April 1.
SLFRF funds were allocated under the American Rescue Plan Act, PL 117-2, to provide $ 350 billion to state, local and tribal governments in aid of the COVID-19 pandemic . Over $ 245 billion has been distributed to governments.
Uses of the funds include expanding access to tests and vaccines and other measures to protect community members, including those at high risk and underserved. Prior to the publication of the final rule, governments were encouraged to start using the funds in accordance with the guidelines contained in an interim final rule.
The final rule is designed to provide more clarity to recipient governments. The provisions of the rule:
- Expand the permitted uses of funds. The rule clarifies that beneficiaries can use funds for certain capital expenditures to respond to economic and public health impacts and render services such as childcare, preschool education, combating learning loss and childcare. development of affordable housing available to all communities affected by the pandemic.
- Expand support for public sector hiring and capacity that are critical to economic recovery and sustaining public services for communities.
- Streamline options to offer a wage bonus to essential workers.
- Expand eligible water, sewer and broadband infrastructure projects.
- Are designed to simplify the program for small communities.
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