Non-Entitlement Units -- Coronavirus State and Local Fiscal Recovery Funds Guidance

 

 

NON-ENTITLEMENT UNITS OF LOCAL GOVERNMENT (NEUs)

  • Non-Entitlement Units include those municipalities with populations of less than 50,000, excluding cities that are designated principal cities of Metropolitan Statistical Areas.

How much money will Non-Entitled Units receive?

  • The current total allocation estimate for Tennessee’s NEUs is approximately $438 million. The final allocations to me made to each NEU are not available at this time, but will be distributed following publication by the U.S. Treasury.  

When will funds from the American Rescue Plan be received?

  • For Non-Entitlement Units, the U.S. Treasury will allocate and pay funds to state governments, and the state will distribute funds to non-entitlement units of local government in proportion to population based on certified numbers from the 2010 Federal Census.
  • Non-Entitlement Units should receive the first half of their allocation within ninety (90) days of enactment – from March 11, 2021.
  • The U.S. Treasury has sixty (60) days to distribute to the state, and the state has an additional thirty (30) days to distribute to the cities, unless an extension is granted by the Secretary of the Treasury.
  • The second half of a city’s allocation will be distributed one year following receipt of the first half.
  • From Interim Final RulePayments in Tranches to Local Governments

What steps need to be taken in order to receive the funds?

  • Non-Entitlement Units must have a valid DUNS number to meet reporting requirements under the program.
  • A DUNS number is a unique nine-character number used to identify an organization and is issued by Dun & Bradstreet. The federal government uses the DUNS number to track how federal money is allocated. Registering for a DUNS number is free of charge.
  • If your municipality does not have a valid DUNS number, please visit this page or call 1-866-705-5711 to begin the registration process.
  • It is also recommended that non-entitlement cities have the following information ready in order to receive funds from the state:
    • Entity Identification Number (EIN), name, and contact information;
    • Name and title of an authorized representative of the entity; and
    • Financial institution information (e.g., routing and account number, financial institution name and contact information).

Are there any restrictions on uses of the funds?

  • Uses of federal funds that are expressly prohibited (additional details provided in the links at the bottom of this page):
  • Directly or indirectly offsetting a tax cut
  • Pension funds
  • From Interim Final Rule: Restrictions on Use

How long is the time frame to spend the funds?

  • Funds for local governments will “remain available through December 31, 2024.” Treasury will need to decide whether this means spent by or obligated by that date.
  • From Interim Final Rule: Timeline for Use of Funds

What are the rules regarding reporting?

From Interim Final Rule: Reporting

Quarterly Project and Expenditure reports: State (defined to include the District of Columbia), territorial, metropolitan city, county, and Tribal governments will be required to submit quarterly project and expenditure reports. This report will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information regarding a recipient’s utilization of award funds. Reports will be required quarterly with the exception of nonentitlement units, which will report annually. An interim report is due on August 31, 2021. The reports will include the same general data as those submitted by recipients of the Coronavirus Relief Fund, with some modifications to expenditure categories and the addition of data elements related to specific eligible uses. The initial quarterly Project and Expenditure report will cover two calendar quarters from the date of award to September 30, 2021 and must be submitted to Treasury by October 31, 2021. The subsequent quarterly reports will cover one calendar quarter and must be submitted to Treasury within 30 days after the end of each calendar quarter.   Nonentitlement units of local government will be required to submit the project and expenditure report annually. The initial annual Project and Expenditure report for nonentitlement units of local government will cover activity from the date of award to September 30, 2021 and must be submitted to Treasury by October 31, 2021. The subsequent annual reports must be submitted to Treasury by October 31 each year.

Treasury will provide further guidance and instructions on the reporting requirements for program at a later date.

How may the funds be utilized?

Example Uses of Funds

Eligible Uses:

A. Public Health and Economic Impacts Overview

- Responding to COVID-19 -- Support public health expenditures, by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff

- Responding to Negative Economic Impacts -- Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector

- Uses Outside the Scope of this Category

B. Premium Pay for Eligible Workers -- Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service in critical infrastructuresectors

C. Lost Public Sector Revenue -- Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic

D. Infrastructure (Overview) -- Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet

- Water and Sewer

- Broadband Infrastructure

Additional Info from Interim Final Rule:

Transfer of Funds

Comments and Effective Date

Recoupment Process

Regulatory Analyses

View Treasury's complete Interim Final Rule (151 pages) -- Use the links below to view specific sections of Treasury's Interim Final Rule, which outlines acceptable uses and restrictions on use. Individual sections of this rule are linked throughout the page below.