Overview of CSLFRF Program

The American Rescue Plan Act of 2021 (ARPA) was signed into law in March 2021. ARPA established the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF), which is a a program that provides funding over a two-year period to all states, counties, and municipalities across the country, including nearly all counties and cities in North Carolina.

The U.S. Department of Treasury (Treasury) is the federal agency responsible for overseeing the implementation of the CSLFRF program. On January 6, 2022, Treasury issued the Final Rule, which governs the eligible uses of CSLFRF. The Final Rule makes several key changes to the Interim Final Rule, including expanding the eligible uses of CSLFRF and easing the administrative burden for some program requirements. Treasury’s Overview of the Final Rule helps summarize the substance of the Final Rule. The Overview and other helpful resources, including the  Compliance and Reporting Guidance (version 3, updated 2/28/22), is available on Treasury’s CSLFRF webpage.

The Final Rule outlines four categories of eligible uses for CSLFRF expenditures. Thus, a local government may expend CSLFRF to support project or programs that provide assistance in one or more of the following ways:

• Support public health expenditures and address address negative economic impacts caused by the public health emergency by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff, and by providing aid to impacted workers, households, small businesses, impacted industries and the public sector.  
• Replace lost public sector revenue by expending CSLFRF on general government services using either the $10 million standard allowance, or the formula approach, whichever is higher.
• Provide premium pay for essential workers performing essential work during the COVID-19 public health emergency
• Make necessary investments in water, sewer, and broadband infrastructure

Local governments in North Carolina must spend the CSLFRF funds consistent with the federal requirements (i.e., the Final Rule) and within the contours of state law authority, including in compliance with the Local Government Budget and Fiscal Control Act, G.S. Ch. 159, Art. 3.

See American Rescue Plan Q&A with Kara Millonzi for more on the School of Government’s outreach.