- Federal Issues
- Federal Issues of Municipal Interest
Federal Issues of Municipal Interest
The League and its federal partner, the National League of Cities, are vigilantly working for the best interests of municipalities in the halls of Washington, D.C.
This year the League has set priorities including infrastructure and recovery.
Bipartisan Infrastructure Law (BIL)
Available Federal Funding Grant Opportunities
Building a Better America for New Jersey's Municipalities (PDF)
Bipartisan Infrastructure Law worksheet (Excel spreadsheets)
Rural BIL Guidebook Spreadsheets (Excel spreadsheets)
U.S. Department of Transportation: The Bipartisan Infrastructure Law Will Deliver for New Jersey (PDF)
U.S. Environmental Protection Agency (EPA) Office of Water: State Revolving Fund Provisions in the Bipartisan Infrastructure Law (PDF)
EPA: Bipartisan Infrastructure Law: A Historic Investment in Water Fact Sheet (PDF)
EPA: Bipartisan Infrastructure Law: EPA 2022 State Revolving Fund (SRF) Estimated Allotments to States, Tribes, and Territories by Program (PDF)
National Telecommunications and Information Administration (NTIA): Infrastructure Investment and Jobs Act New Funding Initiatives (PDF)
NTIA IIJA Broadband Programs Overview for State & Local Governments (PDF)
American Rescue Plan
Allocation Tracker The NLC's Estimated Local Allocation Tracker for the ARP includes estimations for each municipality. Use the allocation tracker to find out how much your community is eligible for. These estimates are subject to change as the U.S. Treasury stands the program up.
March 18, 2022 NEU and Non-UGLGs Agreements and Supporting Documents User Guide
March 4, 2022 Lunch and Learn ARPA SLFRF Final Rule (Video)
March 4, 2022 Lunch and Learn ARPA SLFRF Final Rule (PDF)
January 12, 2022 SLFRF Final Rule Overview (PDF)
January 12, 2022 US Treasury SLFRF Final Rule Webinar slides (PDF)
March 12, 2021 NJLM ARP Presentation Slides (PDF)
March 12, 2021 NJLM ARP Briefer Video
This $1.9 trillion package includes $350 billion funding for state and local governments as well as direct payments to working families; extensive expansion of child tax credits; aggressive action to speed up COVID-19 vaccinations and contain the virus; provides the resources needed to allow schools to safely re-open; immediate economic relief for Americans hit hardest, and support for struggling communities.
For more information, please read the NJLM Town Crier Blog: U.S. Treasury Issues Interim Final Rule to Implement Coronavirus State Fiscal Recovery Funds and NJLM Town Crier Blog: American Resue Plan Signed Into Law.
You can find information, resources, and the latest NLC updates on COVID-19 Response and Relief at https://www.nlc.org/initiative/covid-19-pandemic-response/. Or follow the following links for specific functions.
NLC has created an extensive, searchable summary of provisions relevant to municipalities and local leaders in this historic legislation.
Local Recovery: Five Principles for ARP Implementation
NLC staff has written a CitiesSpeak blog on five principles for ARP implementation.
- ARP Allowable Uses
- ARP Prohibited Uses
- Defining Revenue & Allowable Time Period
- Deadline to Obligate & Spend Funds
- Reporting Requirements
- Application process
- Compliance & Reporting Responsibilities
Within the categories of eligible uses, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities. Recipients may use Coronavirus State and Local Fiscal Recovery Funds to:
- Support public health expenditures, by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff;
- Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector;
- 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;
- 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 infrastructure sectors; and,
- 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.
The Interim Final Rule gives recipients broad latitude to use funds for the provision of government services to the extent of reduction in revenue. Government services can include, but are not limited to, maintenance of infrastructure or pay-as-you-go spending for building new infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services.
The Treasury fact sheet and Quick Reference guide provide more specifics on eligible uses.
Municipalities are forbidden from using the funds to directly or indirectly offset a reduction in net tax revenue due to a change in law from March 3, 2021 through the last day of the fiscal year in which the funds provided have been spent.
Also prohibited are using the funds to make a deposit to a pension fund. Treasury’s Interim Final Rule defines a “deposit” as an extraordinary contribution to a pension fund for the purpose of reducing an accrued, unfunded liability. While pension deposits are prohibited, recipients may use funds for routine payroll contributions for employees whose wages and salaries are an eligible use of funds.
Treasury’s Interim Final Rule identifies several other ineligible uses, including funding debt service, legal settlements or judgments, and deposits to rainy day funds or financial reserves.
Also, general infrastructure spending is not covered as an eligible use outside of water, sewer, and broadband investments or above the amount allocated under the revenue loss provision.
While the program offers broad flexibility to recipients to address local conditions, these restrictions will help ensure that funds are used to augment existing activities and address pressing needs.
Use of these funds is generally forward-looking and should not be used to reimburse recipients for costs incurred by local governments in responding to the public health emergency and the negative economic impacts prior to the American Rescue Plan. Further, the funds should not be used for general economic development or workforce development, outside of the negative economic impacts of the pandemic.
The funds may not be utilized to satisfy nonfederal matching requirements for federal programs whose statue or regulations bar the use of federal funds to meet matching requirements.
All 565 New Jersey municipalities, as well as all 21 counties and the state, will receive an allocation from the federal government pursuant to the American Rescue Plan. 47 municipalities defined as metropolitan areas will receive funding directly from the U.S. Treasury and the remaining 518 municipalities will receive their share of the $578,121,375 that will be sent to the state.
Treasury expects to provide a list of final aid amounts for municipalities with a population under 50,000 people next week.
The funds will be distributed in two tranches, half this year and a half next year. There are varying deadlines to expend the funds, which are detailed below.
Special purpose units of government will not receive funding, however, a local government may transfer funds to a special-purpose unit of government that performs specific functions in the community and the Treasury cited fire, water, sewer, or mosquito abatement district.
Because the federal law requires states to make distributions based on population, states may not place additional conditions or requirements on distributions to municipalities with a population under 50,000, beyond those required by the ARPA and Treasury’s implementing regulations and guidance.
For example, states may not impose stricter limitations than permitted by statute or Treasury regulations or guidance on a municipality’s use of funds based on the town’s proposed spending plan or other policies, nor permitted to offset any debt owed by the municipality against its payment.
Further, states may not provide funding on a reimbursement basis (e.g., requiring municipalities to pay for project costs upfront before being reimbursed with Fiscal Recovery Fund payments), because this approach would not comport with the statutory requirement that states make distributions to the municipalities within the statutory timeframe.
The state is permitted to transfer additional funds they have received from the American Rescue Plan to municipalities.
According to the Interim Final Rule, a definition of “General Revenue” is based on, but not identical to, the Census Bureau’s concept of “General Revenue from Own Sources” in Annual Survey of State and Local Government Finance and includes, taxes, current charges, and miscellaneous general revenue. It excludes refunds and correcting transactions, proceeds from the issuance of debt or the sale of investments, agency or private trust transactions, Intergovernmental transfers between state and local governments count as revenue but intergovernmental transfers from the federal government, including Federal transfers made via a state to a locality pursuant to the Coronavirus Relief Grants or the Fiscal Recovery Funds are excluded.
Revenue should be calculated on an entity-wide basis to minimize the administrative burden for recipients and presents a more accurate representation of the net impact of the public health emergency on revenue.
Municipalities should classify revenue sources as they would if responding to the U.S. Census Bureau’s Annual Survey of State and Local Government Finances. According to the Census Bureau’s Government Finance and Employment Classification manual, the following is an example of current charges that would be included in a state or local government’s general revenue from own sources: “Gross revenue of facilities operated by a government (swimming pools, recreational marinas and piers, golf courses, skating rinks, museums, zoos, etc.); auxiliary facilities in public recreation areas (camping areas, refreshment stands, gift shops, etc.); lease or use fees from stadiums, auditoriums, and community and convention centers; and rentals from concessions at such facilities.”
Recipients are permitted to calculate the extent of reduction in revenue as of four points in time: December 31, 2020; December 31, 2021; December 31, 2022; and December 31, 2023.
This approach recognizes that some recipients may experience lagged effects of the pandemic on revenues. Upon receiving Fiscal Recovery Fund payments, recipients may immediately calculate revenue loss for the period ending Dec. 31, 2020. Any pre-pandemic projections are prohibited.
Funds that are obligated by December 31, 2024, for eligible water, sewer, or broadband infrastructure must be completed by December 31, 2026. All other spending must be complete by December 31, 2024.
Financial records and supporting documents related to the award must be retained for a period of five years after all funds have been expended or returned to the Treasury, whichever is later. This includes those which demonstrate the award funds were used for eligible purposes.
Recipients will be required to submit an interim report, quarterly project and expenditure reports, and annual recovery plan performance reports as specified below, regarding their utilization of Coronavirus State and Local Fiscal Recovery Funds.
Entitlement communities (generally those with a population above 50,000 and received funds directly from the U.S. Treasury) will be required to submit quarterly project and expenditure reports.
This report will include financial data, information on contracts and sub-awards over $50,000, types of projects funded, and other information regarding a recipient’s utilization of award funds. An interim report is due on Aug. 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 Sept. 30, 2021, and must be submitted to Treasury by Oct. 31, 2021. The subsequent quarterly reports will cover one calendar quarter and must be submitted to the US Dept. of Treasury within 30 days after the end of each calendar quarter.
Municipalities with a population above 250,000 will have to submit an annual Recovery Plan Performance report.
Non-entitlement communities (generally those with a population under 50,000 people and received federal funds from the state) will be required to submit the project and expenditure report annually. The initial annual Project and Expenditure report will cover activity from the date of award to Sept. 30, 2021, and must be submitted to Treasury by Oct. 31, 2021. The subsequent annual reports must be submitted to theUS Dep. of Treasury by Oct. 31 each year.
Eligible entities, at this time entitlement communities, can apply directly for funding through the Treasury portal. To complete a submission on behalf of your municipality, you will be asked to provide the following information:
- Jurisdiction name, taxpayer ID number, DUNS Number, and address
- Authorized representative name, title, and email
- Contact person name, title, phone, and email
- Funds transfer information, including recipient’s financial institution, address phone, and routing number and account number
- Completed certification document (to be signed by the authorized representative)
Municipalities must submit a request to receive funding even if they have previously applied for other programs through the federal Treasury Submission Portal and municipalities will receive further communications regarding the status of their submission via the email address provided in the Treasury Submission Portal.
As the League has previously shared, metropolitan areas need to have an active number in the Data Universal Numbering System (DUNS) and an active registration with the System for Award Management (SAM) database at SAM.gov to receive the payments. The DUNS and SAM registration process may take several business days to complete and Treasury recommends that eligible entities begin those registration processes if they have not already completed them.
Municipalities with a population under 50,000 will need to have an active registration in the DUNS system.
The Division of Local Government Services is developing a Local Finance Notice to provide guidance to municipalities. As the federal government is continuing to provide updates and guidance and the League will update accordingly.
EPA Lead and Copper Line Replacement Listening Sessions
The U.S. Environmental Protection Agency (EPA) has announced listening sessions and roundtables to obtain input on the Lead and Copper Rule Revisions (LCRR). The comment period ends on June 17, 2021. The impact of lead exposure, including through drinking water, is a public health issue of paramount importance. The goal of public engagement is to obtain further input on EPA's LCRR, including from individuals and communities that are most at risk of exposure to lead in drinking water.
Virtual public listening sessions will be held on April 28, 2021, and May 5, 2021, from 10:00 a.m. to 10:00 p.m., eastern daylight time. Those interested in speaking must be pre-registered and can sign up for a 3-minute speaking slot.
Members of the public that are unable to attend any of the events will be able to submit comments and reference Docket ID: EPA-HQ-OW-2021-0255 until June 30, 2021.
EPA will host community-focused virtual roundtables in May 2021 to facilitate discussion on unique perspectives on LCCR-related topics with local community groups, utilities, and local government entities, and elected officials.
Starting in June of 2021, EPA will also host virtual roundtables with stakeholder groups. These stakeholder roundtables will allow representatives to discuss LCRR-related topics and provide their national perspective to the Agency. EPA also intends to host a national co-regulator meeting with primacy agencies with states in July 2021 to discuss the feedback received from communities and stakeholders.
EPA requests that communities or organizations that would like to be considered for a community-focused or stakeholder roundtable submit a nomination letter to Agency at LCRR@epa.gov by April 23, 2021.
House Federal Community Projects Process
The House Appropriations Chair Rep. Rosa DeLauro announced that they will be accepting Members of Congress’ requests for Community Project Funding in appropriations bills for the 2022 fiscal year. This announcement is the first move in the 117th Congress to open up the process for the reincarnated Congressional “earmark” funding process.
Additionally, the House Committee on Transportation and Infrastructure Committee Chair Peter DeFazio (OR) and Chair of the Subcommittee on Highways and Transit Eleanor Holmes Norton (DC) announced the Committee will provide an opportunity for Members of Congress to submit requests for highway and transit project designations under a new formal process.
The 117th Congress has written a new set of rules that would allow them to go after key priorities, like COVID-19 relief, climate, as well as revive Congressionally directed spending on projects – known as “earmarks.”
This is a new opportunity, although with a quick timeline, for municipal project funding. More details will be forthcoming but we would suggest you start planning now. Congress members must provide evidence of community support as one of the compelling factors in their decision to select the requested projects.
There will be specific guardrails to prevent excesses that occurred prior to the elimination of earmarks about 15 years ago. They include:
- Congress members must submit a written request, which will be posted online
- Early public disclosure
- Ban on for-profit recipients
- A cap on overall funding at no more than 1% of discretionary spending
- Congress members are limited to 10 requests, although the number of projects that receive funding will be less than that.
The committee will require the Government Accountability Office to audit a sample of enacted community project funding and report to Congress.
The League’s partner, the National League of Cities has a guide for Transportation Project Designations Process and Timeline that are a good reference point. Further guidance will be provided as it is available. In the meantime, we strongly suggest you review this funding opportunity with your administrator, engineer, and public works department to plan what funding for transportation projects you would like to request as well as reach out to your Congressional representatives.