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American Rescue Plan – Non-entitlement Units

Coronavirus Local Fiscal Recovery Fund

Overview:

The American Rescue Plan Act of 2021 (ARPA) appropriates $19.53 billion to States for distribution to tens of thousands of non-entitlement units of local government (NEUs). The ARPA directs the Department of the Treasury (Treasury) to make payments to each State for distribution to NEUs within the State.

Indiana NEUs will be required to submit the CLFRF Request For Payment and all required Treasury documents to the Indiana Finance Authority prior to receiving its first half of the funds. Once submission requirements have been satisfied, the State will have between 30 to 60 days to disburse payments to NEUs. The second half of the funds will be received no earlier than 12 months from the first half. Those funds will be distributed in the same manner as the first, pursuant to each completed request for payment.

Key Links:

For inquiries about the NEU payment process, please email COVID-19@ifa.in.gov

For all other inquiries, including questions on eligible expenditures, please visit Treasury’s State & Local website to review Fund information or email SLFRP@treasury.gov

Minor Civil Divisions:

As part of the American Rescue Plan Act (ARPA), states are responsible for distributing a portion of the Coronavirus Local Fiscal Recovery Fund allocation to “non-entitlement units” (NEUs) based on population. In its Guidance on Distribution of Funds to Non-Entitlement Units of Local Government, the U.S. Department of the Treasury (UST) established guidelines by which states were to identify eligible NEUs.  UST provided a list for each state that included “incorporated places” and “minor civil divisions” (MCD).  All incorporated places on the list were deemed eligible for payment.

Using designations from the Bureau of the Census data, Indiana was identified as one of twenty states with MCDs. The guidance further identified Indiana as one of eight “weak-MCD” states in which MCDs play less of a governmental role but are still active governmental units. These eight states were required by UST to undertake a “facts-and-circumstances” test to determine eligibility of the MCDs based on their legal and operational capacity to accept ARPA funds and a requirement that MCDs provide a broad range of services that would constitute eligible uses under ARPA. Specific authorities and composition of budgets were to be considered in this determination. MCDs lacking the capacity or the broad range of ARPA services should not be eligible for NEU distribution.

The Indiana MCDs listed by the UST provide limited services that would be deemed eligible for ARPA. After the review of statutory duties and financial records, the State of Indiana has determined that the MCDs listed here are ineligible for Local Fiscal Recovery Funds due to lack of operational capacity and the broad ranges of services required under the ARPA.