American Rescue Plan Act: Aid for Small Businesses and Nonprofits with ARP/CLFRF

<p>The American Rescue Plan Act of 2021 (ARPA) is a wide-ranging law that provides federal funding in areas ranging from child care to higher education to community service to relief for shuttered venues to a restaurant revitalization fund. Separate from those programs, one component of ARPA distributes Coronavirus State and Local Fiscal Recovery Funds (“CLFRF”) to state and local governments for the purpose of responding “to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries.” (Part 8, Subtitle M of ARPA).</p> <p>Temporary rules governing the use of CLFRF have been promulgated by the U.S. Department of Treasury (“Treasury”) through an Interim Final Rule (IFR), codified at Part 35 of Subtitle A of Title 31 of the Code of Federal Regulations. In an “explainer” on the IFR, Treasury confirmed that “Funds used in a manner consistent with the Interim Final Rule while the Interim Final Rule is effective will not be subject to recoupment.”</p> <p>It is possible that the actual final rule, to be promulgated at some later date (possibly later in 2021), will allow for funds to be expended for a wider range of programs or services. For that reason, some local governments are engaged in planning but are waiting for the final rule before making irreversible expenditure decisions. Other local governments may feel comfortable moving forward with expenditures, so long as the funded activities fall squarely within the guidance contained in the IFR. This [...]</p>