Press Releases

LOWELL, MA – Today, Congresswoman Lori Trahan (MA-03), a member of the Regional Leadership Council, led 55 House members in sending a letter to the U.S. Department of the Treasury requesting a change to its proposed Interim Final Rule on State and Local Fiscal Recovery Funds (SLFRF) allocated to cities and towns from the American Rescue Plan Act (ARPA). The rule, issued last month, could prevent local municipalities from spending their ARPA funds.

“We are writing to express our concerns with the 2023 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Interim Final Rule. In particular, we are concerned with the potential impact that the new definition of ‘obligation’ will have on local governments with regard to the December 31st, 2024 deadline for the local obligation of funds,” the lawmakers wrote.

ARPA requires SLFRF cities and towns to obligate the funding they received by December 31, 2024, and spend those funds by December 31, 2026. Under the proposed rule issued last month, the Treasury Department updated the definition of the word “Obligation” to require municipalities to have entered into a contract to implement their plan for SLFRF funds by the end of next year. Many municipalities have either not finalized their ARPA plans or entered into contracts to implement plans adopted by their local legislative bodies, meaning under this new definition, they will be forced to go to bid within the next year, further flooding local markets and raising bid prices. Effectively, the proposed rule risks requiring local governments to choose between paying higher bid prices or losing their SLFRF funds altogether.

“The concerns raised in this letter apply not only to the municipalities and tribes in the districts we have the honor to represent, but to those throughout the country. However, there is another way forward,” the lawmakers continued. “We urge Treasury to implement a final rule that enables SLFRF recipients to achieve the obligation requirement through an appropriation, budget, or allocation process. This will allow recipients the time they need to spend these funds.”

A digital copy of the letter sent today can be accessed HERE.

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