Coronavirus State and Local Fiscal Recovery Funds for Non-entitlement Units of Local Government

The Coronavirus Local Fiscal Recovery Fund provides $19.53 billion to support tens of thousands of non-entitlement units of local government, which are local governments typically serving a population under 50,000.

The Coronavirus Local Fiscal Recovery Fund provides a critical source of relief for these smaller local governments, many of which had not previously received direct fiscal assistance from the federal government since the onset of the COVID-19 pandemic.


Non-entitlement units of local government (NEUs), defined in section 603(g)(5) of the Social Security Act, as added by section 9901 of the American Rescue Plan Act of 2021, are local governments typically serving populations of less than 50,000. NEUs include cities, villages, towns, townships, or other types of local governments. 

NEUs should expect to receive Coronavirus Local Fiscal Recovery Fund payments through their state governments. State governments will receive a specific allocation of these funds from Treasury for this purpose and are responsible for distributing these funds to NEUs within their state. Award amounts are based on the population of the NEU.

For more information, please see the NEU Quick Reference Guide.


Aggregate allocations to states for distribution to NEUs may be found here. The status of payments to states for distribution to NEUs may be found here.

Treasury’s guidance on NEUs provides further information on eligibility and a step-by-step guide for states to allocate and distribute funds to their NEUs. States should follow the guidance and calculate allocations based on the list of local governments and their respective populations. The statute requires that all allocations to eligible governments be based on population. Treasury expects to make payments to states for distribution to NEUs in two equal tranches approximately twelve months apart.

For 42 states, the list of local governments on the Treasury website details all the local governments that are eligible for a distribution as an NEU. For the remaining eight states with minor civil divisions that typically perform less of a governmental role (Illinois, Indiana, Kansas, Missouri, Nebraska, North Dakota, Ohio, and South Dakota), in order to determine eligibility of their minor civil divisions, each state should undertake a facts-and-circumstances test to determine whether the minor civil division has the legal and operational capacity to accept ARPA funds and provides a broad range of services that would constitute eligible uses under ARPA. 

Local governments that are not included on the lists of local governments should review the Allocation for Metropolitan Cities table to determine if they have instead received a metropolitan city allocation. Treasury has also published a definitional and data methodology for the lists of local governments. 


NEUs with further questions should review Treasury’s 2022 Final Rule, which is effective on April 1, 2022, and Overview of the 2022 Final Rule, or for questions on allocations and funding distribution, contact their respective state governments. Local governments that are NEUs are not eligible to receive this funding directly from Treasury and should not request funding through the Treasury Submission Portal.

While each state has its own process and requirements, Treasury has provided a pre-submission checklist with basic information that every NEU should expect to provide when requesting funding from their respective state.

The 2022 Final Rule webinar and slide presentation provide an introduction and summary of the Final Rule.

Additionally, in December 2022, Congress amended the SLFRF program through the Consolidated Appropriations Act, 2023, providing additional flexibility to use SLFRF funds to respond to natural disasters, build critical infrastructure, and support community development. Treasury issued the 2023 Interim Final Rule implementing the amendments and is seeking feedback from the public on all aspects of the Interim Final Rule. Treasury released an Overview of the 2023 Interim Final Rule, which provides a summary of major rule provisions to assist recipients and stakeholders.

Comments on the 2023 Interim Final Rule may be submitted through the Federal eRulemaking portal or by mailing comments to the address provided in the Interim Final Rule. All comments should be captioned “Coronavirus State and Local Fiscal Recovery Funds 2023 Interim Final Rule Comments.” 

In addition, in November 2023, Treasury issued an Obligation Interim Final Rule to address recipients’ questions regarding the definition of “obligation” and provide related guidance and clarifications. Treasury also released an Obligation Interim Final Rule Quick Reference Guide, which provides a summary of the Obligation Interim Final Rule to assist recipients and stakeholders. 

Treasury is accepting comments on the Obligation Interim Final Rule. Comments may be submitted through the Federal eRulemaking portal or by mailing comments to the address provided in the Interim Final Rule. All comments should be captioned “Coronavirus State and Local Fiscal Recovery Funds Obligation Interim Final Rule Comments.”


State governments that have made a request for their own funds in the Treasury Submission Portal will be considered by Treasury to have requested funding for their NEUs as well, and should expect to receive their first tranche of payments for distribution to their NEUs within a few days of submission. No further action is required on the state’s part to receive these payments from Treasury. State governments that have not submitted a request are encouraged to do so at their earliest convenience.

Following receipt of this funding from Treasury, ARPA requires each state to distribute these funds to its NEUs within 30 days unless granted an extension by Treasury. To request an extension form, states should email with the subject line “NEU Distribution - Extension Form".

Treasury has issued guidance for states on distributions to NEUs, along with a list of local governments as referenced in the guidance. Treasury’s definitional and data methodology for the list can be found here. A brief overview of the guidance can be found in this webinar deck for state governments. Answers to frequently asked questions on distribution of funds to NEUs can be found in this FAQ supplement, which is regularly updated.

States can find required documents to distribute to NEUs, in accordance with the guidance, here:

Further, Treasury has launched its new procedure for states to submit and process requests for transfers and returns on behalf of their respective NEUs in the Award Redirect Portal. States may also use this Portal to capture unique situations encountered during the distribution of SLFRF funds to eligible NEUs. For more information on how to submit your request, please refer to the Treasury Award Redirect Portal Instructions.

Treasury has updated its cadence of processing all transfers and return submissions to a monthly basis to aid States in finalizing all NEU decline-and-transfer transactions of SLFRF award funds. As a reminder, States must obtain signatures from their respective NEUs on the decline and transfer form by June 30, 2024. 

The decline and transfer form may be executed in two ways as described below: 

  1. When a State initiates the decline and transfer process in Treasury’s Award Redirect Portal, a DocuSign link for the decline and transfer form is generated and emailed to the NEU’s Authorized Representative. 
  2. A State can download the decline and transfer form from Treasury’s Award Redirect Portal, send the form to the NEU’s Authorized Representative for signature, and manually upload the signed form in the Award Redirect Portal under the respective submission.


Each non-entitlement unit of local government (NEU) is required to meet compliance and reporting responsibilities, as defined in the 2021 Interim Final Rule , the 2022 Final Rule (effective on April 1, 2022), the 2023 Interim Final Rule and further described in the Compliance and Reporting Guidance. The Reporting Guidance requires program and performance reporting to build public awareness, increase accountability, and monitor compliance of eligible uses.

Each NEU was required to submit a Project and Expenditure Report by April 30, 2022 and then quarterly or annually thereafter, based on their total allocation.

User Guide



Refer to Additional information on Compliance and Reporting for reporting requirements.