Treasury Department Announces Tribal Consistency Fund Allocation Methodology
This week, the U.S. Department of Treasury announced the allocation methodology of the Local Assistance and Tribal Consistency Fund. Tribal governments can request their allocation beginning on July 29, 2022, at 3 p.m. and have until Oct. 31, 2022, to do so.
The American Rescue Plan established a $2 billion Tribal Consistency Fund. Of this amount, Congress reserved $500 million for tribal governments – half of which is available in fiscal year 2022 (FY22), and the remaining half in fiscal year 2023 (FY23). The statute gives the Treasury Department discretion on how to allocate the $500 million among tribes, "taking into account the economic conditions of each Tribe." Once received, tribes can use this funding for any governmental purpose except lobbying.
The remaining $1.5 billion was reserved for revenue sharing counties. For these counties, the law requires the Treasury Department to make allocations based on certain factors indicative of economic conditions. Specifically, under statute, the Treasury Department must consider poverty rates, household income, land values and unemployment rates "as well as other economic indicators." Thus, while the Treasury Department was given specific rules on how to allocate the Tribal Consistency Fund among counties, it was given broad authority with respect to tribes. The Treasury Department held tribal consultations and requested comments, which were later summarized.
The Treasury Department announced that allocation of the Tribal Consistency Fund will be based on self-certified enrollment and employment data. For these two data points, the Treasury Department will use what tribes previously submitted for allocations of Fiscal Recovery Funds (FRF).
However, one key difference in methodology is that for FRF, 65 percent of the funds were allocated based on enrollment, while 35 percent of the funds were allocated based on employment data.
By contrast, for the Tribal Consistency Fund:
- 90 percent of the allocated funds will be based on enrollment, subject to a maximum of $2.7 million per year
- 10 percent will be based on employment per capita data, meaning the enrollment to employment ratios, and is also subject to a maximum of $300,000 per year
So, the maximum amount a tribe can receive from the Tribal Consistency Fund is $6 million. This is a significant difference from the Treasury Department's methodology for FRF, which was not subject to an allocation cap.
The Treasury Department has also provided guidance regarding the use of the Tribal Consistency Funds. Importantly, the Treasury Department notes that tribes may treat these funds in a similar manner to how they treat funds generated from their own local revenue, and there is no deadline by which to expend these funds. The Treasury Department also expects tribes to submit an annual Project and Expenditure Report, which is expected to require data on obligations and expenditures by category of use and certification that the funds were not used for lobbying.
The Treasury Department has announced that tribal governments can review their final allocation amount and request payment for FY22 beginning on July 29, 2022, at 3 p.m. The deadline to request payment is Oct. 31, 2022. At a later date, the Treasury Department will communicate the availability of FY23 payments, which will be based on the above outlined allocation methodology. These FY23 payments will also allocate any amounts unclaimed and reallocated from FY22 payments.
If you have any questions, please do not hesitate to reach out to the authors or another member of Holland & Knight's Native American Law Team.