News Detail

MAT Staff March 29, 2021

American Rescue Plan Act Information

On March 11th, 2021, President Biden signed the American Rescue Plan Act (The Act) into law. The Act provides stimulus to individuals, businesses, and governments to assist in the COVID-19 response. Several provisions in The Act are of interest to townships.

Local Government Relief:

$19.5 Billion, split evenly between all counties and municipalities in the US. In Minnesota specifically, it will receive $2 billion to local units in MN. More specifically, $350 Million will be provided to “non-entitlement units,” which are most cities and towns under 50,000 people.

The $350 million will be distributed based on population share, the amount per township will not exceed 75% of the township’s budget. The total estimation for townships can be found here.

The total disbursement will be split in half. The first half will be sent 60 days after March 11th. The State will distribute funding 30 days after reception; however, the manner is not yet known, and information on much of spending, totals, and timelines are not certain yet. States may extend the dissemination up to 120 days. The second half distributed 12 months after the first distribution.

The funds are given broader eligible uses from the federal level than the allowed uses for funds in the CARES Act. These funds may be used for any costs incurred between March 3rd, 2021, and December 31st, 2024. However, it is possible that the State may further limit this spending. Specific eligibility from the federal level are as follows:

  • Assistance to households, small businesses, and non-profits to aid in response to the COVID-19:
  • Premium pay for essential workers:
    • Limits include $13 per hour and a $25k cap to essential workers:
  • Replacement of reduced revenue:
    • Currently thought to be calculated as the gap between 2019 and 2020 revenue:
  • Some infrastructure investments, like:
    • Water:
    • Sewer:
    • Broadband:
  • Transfers to other entities like:
    • Non-profits:
    • Public benefit corporations involved in transporting people or cargo:
    • Special purpose governments:
      • These are units with a specified focus like Joint Powers Agreements:
    • State:
    • Tribal organizations:

Some costs that the American Rescue Plan Act specifically said are ineligible include:

  • Directly or indirectly offset tax reductions or increases: and
  • Pensions.

There are three other key notes:

  1. The State may change several issues, e.g., distribution method, the amount provided, the timeline for spending, and what the funds may be spent on:
  2. There will be, but there is currently no guidance from the State on the uses, similar to what was provided under the CARES Act: and
  3. There will be a reporting requirement to the Federal Treasury Secretary.

(Found in Section 9901)

Families First Coronavirus Response Act:

Towns are subject to the Families First Coronavirus Response Act (FFCRA), which requires employers to provide employees paid time off to care for themselves or certain qualifying people after contracting COVID-19 or being quarantined. Originally Towns were not provided reimbursement for the extra costs they incurred due to the Act. However, the American Rescue Plan Act has provided relief to townships. For more information on the FFCRA, please read this poster.

(Found in Section 1108)

Firefighter Grants:

$300 million for assistance to firefighter grants.

(Found in Section 4013)



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