Address Negative Economic Impacts and Public Sector Capacity

ARPA aims to respond to the negative economic impacts of the COVID-19 pandemic. The Final Rule outlines that ARPA resources can be used for assistance to households, small businesses, and nonprofits, as well as to offer aid to impacted industries such as tourism, travel, and hospitality.

The pandemic has had a severe impact on households and small businesses, particularly low-income workers and communities and people of color. While eligibility is flexible to respond to a recipient’s needs, the intent of this portion of ARPA is to remediate the impact of the pandemic on these households, businesses, non-profits, and workers in communities disproportionately affected.

Eligible instances of economic impact responses to the COVID-19 emergency include:

Build internal capacity to implement economic relief programs, with investments in data analytics, targeted outreach, technology infrastructure, and impact evaluations
Responding to households and communities that were negatively impacted by the pandemic
Responses to disproportionate impacts of the pandemic on households and communities
Providing assistance to small businesses, non-profits, and impacted industries

To determine whether a program or service “responds” to the public health emergency, the recipient must do the following:

Identify a need or negative impact of the public health emergency
Identify how the program, service, or other intervention addresses the need or negative impact
To be eligible for ARPA funds, the program, service, or other intervention must be in response to the disease itself or the harmful consequences of economic disruptions from or exacerbated by the COVID-19 public health emergency

Investment in capital expenditures, including property, facilities, and equipment, is allowable under this category for certain instances. Applicants must include written justifications for any expenditures over $1 million. This justification should include how the capital expenditure is “related and reasonably proportional to the pandemic impact identified and reasonably designed to benefit the impacted population or class.” Ineligible capital purchases include construction of correctional facilities as a response to increased rate of crime, construction of new congregate facilities to decrease spread of COVID-19 in facilities, and construction of convention centers, stadiums, or other large capital projects for general economic development aid to impacted industries.