U.S. Treasury Releases ARPA Capital Projects Fund Guidance


On Monday, September 20, 2021, the U.S. Treasury Department released new guidance for the $10 billion Capital Projects Fund that was authorized under the American Rescue Plan Act (ARPA). Over $253 million has been allocated to Illinois through the Capitol Projects Fund. It is important to note that these are grants for states, which can then be awarded to sub-recipients (i.e. counties).

Preliminary Overview of U.S. Treasury’s Coronavirus Capital Projects Fund Guidance

  • Provides $10 billion to U.S. Treasury to provide payments to states, territories, freely associated states and tribal governments to carry out critical capital projects directly enabling work, education, and health monitoring, including remote options, in response to the public health emergency with respect to COVID-19
  • Eligible recipients include:
    • States, the District of Columbia and Puerto Rico
      • Recipients may award funds to subrecipients (I.e. counties), non-profits and private entities
    • Seven eligible territories and freely associated states (Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau)
    • Tribal governments
  • Covered period: All funds must be spent by December 31, 2026. Recipients must return to Treasury any grant funds that are not used by the end of the period of performance on December 31, 2026
    • Treasury has the authority to provide grant extensions to the period of performance if a recipient requests one
  • For a Capital Project to be an eligible use of funds, it must meet all of the following three criteria (additional information on eligible projects below):
    • The Capital Project invests in capital assets designed to directly enable work, education, and health monitoring
    • The Capital Project is designed to address a critical need that resulted from or was made apparent or exacerbated by the COVID-19 public health emergency
    • The Capital Project is designed to address a critical need of the community to be served by it
  • Ineligible projects include:
    • General infrastructure projects, such as highways, bridges, transit systems and ports
    • General construction and improvement of hospitals and traditional schools are not presumed to be eligible projects
      • HOWEVER, there may be opportunities for such projects to receive funding under the Capital Projects Fund program if they meet the project eligibility criteria. These projects will be reviewed on a case-by-case basis
  • Neither the Davis-Bacon Act or Davis-Bacon Act related provisions requirements apply to projects funded solely with award funds from the Capital Projects Fund. However, similar to the Recovery Fund, recipients may be subject to the requirements of the Davis-Bacon Act, when Capital Projects Fund grant funds are used on a construction project in conjunction with funds from another federal program that requires enforcement of the Davis-Bacon Act.

Additional Information on Eligible Projects

Broadband Infrastructure Projects

  • Projects are eligible for funding under the Capital Projects Fund program if the infrastructure is designed to deliver, upon project completion, service that reliably meets or exceeds 100 Mbps download/100 Mbps upload.
    • If it would be impracticable, because of geography, topography, or excessive cost, there is some flexibility – the project must be designed so that it reliably meets or exceeds 100 Mbps download speeds and between 20 Mbps and 100 Mbps upload speeds and be scalable to a minimum of 100 Mbps download/100 Mbps upload
    • Recipients are encourages to prioritize investments in fiber-optic infrastructure
    • Treasury encourages recipients to prioritize projects that involve broadband networks owned, operated by or affiliated with local governments
    • Recipients are encouraged to prioritize projects that are designed to provide service to households and businesses not currently served by a wireline connection that reliably delivers at least 100 Mbps of download speed and 20 Mbps of upload speed
    • Recipients are encourages to invest in middle-project projects

Digital Connectivity Technology Projects

    • Purchase and/or installation of devices and equipment to facilitate broadband internet access. Devices and equipment include laptop, tablets and desktop personal computer for distribution to members of the public through a short- or long-term loan program or to be made available for use in public facilities

Multi-Purpose Community Facility Projects

  • Projects to construct or improve buildings that are designed to jointly and directly enable work, education, and health monitoring are eligible for funding under the Capital Projects Fund program. Examples of eligible projects include:
    • Projects to construct or improve full-service community schools that provide a comprehensive academic program to their students and adult education in the community at large; health monitoring to their students and the community; and workforce training or career counseling services that provide community members with the knowledge needed to engage in work, including digital literacy training programs
    • Projects to construct or improve libraries that provide public access to the internet for purposes including work, education, and health monitoring such as offering digital skills programs and support for community members engaging in virtual learning
    • Projects to construct or improve community health centers that, in addition to engaging in health monitoring, provide a broader range of services to the communities they serve, including activities such as access to job counseling employment services, as well as health education classes or internship programs for medical professionals.

Additional information: