New U.S. Treasury rules give ASG flexibility in prioritizing projects for funding
Washington, D.C. – Congresswoman Uifa’atali Amata is hailing the final rule from the U.S. Treasury Department, which provides authoritative guidance to use substantial federal funding under the American Rescue Plan Act for infrastructure projects, with possibilities including hospital infrastructure, water/sewer updates, or removing and replacing old lead pipes.
Under the new Treasury rule, finalized this month, applications from American Samoa Government for spending projects over $10 million with American Rescue funds – already allocated to American Samoa – can go forward following application with justification, needs demonstrated, and approval from Treasury. The rule could allow ASG to redirect upwards of $100 million to key infrastructure developments like improvements to LBJ hospital and lead pipe remediation.
“I’m encouraged by this rule, and that the Treasury Department has already approved a similar plan for a project in Guam, so we appear to have a good path forward,” Congresswoman Amata said. “This shows the Treasury Department seems inclined to support territorial applications to spend American Rescue Plan dollars on our biggest needs. In American Samoa, we have a clear case under this Treasury rule for spending American Rescue funds on lasting infrastructure improvements, likely justified under the rule by our population and economic factors. I want to thank Secretary of the Treasury Janet Yellen for the options opened up to American Samoa under this rule, and I want to congratulate Governor Lemanu P.S. Mauga and Lt. Gov. Talauega E.V. Ale.”
In January, the U.S. Department of the Treasury issued the Final Rule for the State and Local Fiscal Recovery Funds (SLFRF) program, enacted as a part of the American Rescue Plan, which delivers $350 billion to various state, territory, local, and Tribal governments to support their response to and recovery from the COVID-19 pandemic.
The SLFRF program ensures governments have the resources needed to respond to the pandemic, including providing health and vaccine services, supporting families and businesses struggling with the pandemic’s economic impacts, maintaining vital public services, and building a strong and equitable recovery.
Under this final rule – which takes effect on April 1, 2022 – state and local governments have new and increased flexibility to pursue a wider range of uses, as well as greater simplicity so governments can focus on responding to the crisis in their communities and maximizing the impact of their funds.
The State and Local Fiscal Recovery Funds Program final rule provides additional clarity and flexibility for recipient governments, including:
- First, Treasury has expanded the non-exhaustive list of uses that recipients can use to respond to COVID-19 and its economic impacts – ensuring states and localities can adapt quickly and nimbly to changing public health and economic needs. This includes clarifying that recipients can use funds for certain capital expenditures to respond to public health and economic impacts [such as hospital improvements]and making services like childcare, early education, addressing learning loss, and affordable housing development available to all communities impacted by the pandemic.
- Second, Treasury has expanded support for public sector hiring and capacity, which is critical for the economic recovery and in maintaining vital public services for communities.
- Third, Treasury has streamlined options to provide premium pay for essential workers, who bear the greatest health risks because of their service in critical sectors.
- Fourth, Treasury has broadened eligible water, sewer, and broadband infrastructure projects – understanding the unique challenges facing each state and locality in delivering clean water and high-speed broadband to their communities.
- In addition to these expansions, Treasury has greatly simplified the program for small localities – many of whom have received a historic federal investment in their communities through this program – including through the option to elect a standard allowance for revenue loss rather than calculating revenue loss through the full formula.
The final rule provides broader flexibility and greater simplicity in the program, in response to public comments. Among other clarifications and changes, it provides for the following:
- Public Health and Negative Economic Impacts: In addition to programs and services, the final rule clarifies that recipients may use funds for capital expenditures that support an eligible COVID-19 public health or economic response. For example, recipients may build certain affordable housing, childcare facilities, schools, hospitals, and other projects consistent with the requirements in this final rule and the Supplementary Information.
- Water, Sewer, and Broadband Infrastructure: The final rule significantly broadens eligible broadband infrastructure investments to address challenges with broadband access, affordability, and reliability, and adds additional eligible water and sewer infrastructure investments, including a broad range of lead remediation and stormwater management projects.
These options from Treasury will give the Governor and ASG the flexibility they need to prioritize projects at their discretion, such as improvements to LBJ, schools, and/or other important water, sewer, and broadband infrastructure efforts.
“This was a high priority for all the territories to be able access expanded use of funds for critical infrastructure improvements,” Amata said. “I look forward to assisting the Governor and the whole ASG team in seeking Treasury’s approval and shepherding through this federal support for projects that provide lasting benefits to American Samoa.”