For Immediate Release
January 7, 2022
Contact: Christina Hollenback, 347-746-5521
Elyssa Pachico, 503-347-2329,




Biden Administration declares the State of Alabama’s proposed use of up to $500 million in American Rescue Plan funds to build prisons INELIGIBLE and sends a clear message in support of community investment in health, safety, and inclusive economic development

(New York, NY) Investors and activists are applauding a major victory as the Treasury Department released their Final Rule on State and Local Fiscal Recovery Funds for the American Rescue Plan Act. The updated rule language makes state plans to use COVID-19 relief funds to construct new prisons ineligible.

“Treasury presumes that the following capital projects are generally ineligible: Construction of new correctional facilities as a response to an increase in rate of crime; Construction of new congregate facilities to decrease spread of COVID-19 in the facility.”

With this ruling, the Administration supports calls from Communities Not Prisons coalition and investors across the country questioning and resisting Alabama’s efforts to use relief funds to construct prisons approved during a special legislative session at the end of September 2021. It is still uncertain whether Alabama would move forward with construction.

The Biden Administration’s decision to prevent federal COVID relief dollars from supporting prison construction is a step in the right direction toward unwinding federal policy that has historically inflicted harm and contributed to the growth in mass incarceration.

This action creates unprecedented investments in productive infrastructure in early, K-12 and higher education; expanded community based public health and safety; access to higher quality and affordable healthcare; eradication of lead service lines and septic tanks which undermine the health, well-being and cognitive development of children; workforce development; and the provision of high quality, middle-to-low-income housing. These investments will have positive and long-lasting impacts for Black, Brown, Indigenous and systems impacted communities especially in places like Alabama that rank among the worst in the nation across many of these areas.

“Prisons are the worst kind of racket — dangerous, corrupt, and inhumane. We welcome the U.S. Department of the Treasury’s Final Rule that ensures American Rescue Plan Act funds are not misused to fund prison construction in Alabama. This victory is possible thanks to the incredible organizing by Alabama grassroots leaders, advocates, and investors from across the country,” said Matt Nelson, executive director of

“The Treasury Department has confirmed what was already obvious: that the American Rescue Plan Act was not designed to fund a prison construction boom,” said Veronica R. Johnson, deputy director of the Alabama Justice Initiative. “Given that ARPA funds are plainly not eligible for building prisons, our state leaders should re-allocate that $400 million toward actual COVID relief and finally acknowledge that building a bunch of new prisons is not a viable solution to Alabama’s problems.”

“The Biden/Harris Administration is sending a clear message that federal COVID relief dollars should be spent on repairing harm, uplifting more effective community based public safety and violence prevention strategies, and expanding equitable infrastructure to spur economic prosperity,” said Christina Hollenback, Founder and Managing Partner of Justice Capital. “Investors will continue to resist any efforts to exacerbate harm in Black, Brown, Indigenous and systems-impacted communities. We look forward to working with Alabama and all states ready to address inequities and expand economic prosperity.”

We are happy to see that COVID funds can only be used for capital projects that are “reasonably designed to benefit the individual or class that experienced the impact or harm,” said Andrea James, the Executive Director of the National Council for Incarcerated and Formerly Incarcerated Women and Girls. “Alabama’s prison plan would benefit no one but instead would increase the pain of mass incarceration that disproportionately impacts communities of color. Under any legitimate reading of the Treasury Rule, Alabama cannot use COVID-19 funds to build mega prisons.”


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