Federal and state library officials have confirmed that funds allocated under the $1.9 trillion American Rescue Plan (ARPA) can be used to purchase digital content. But in guidance issued this week, leading vendor OverDrive warned libraries that purchases made with ARPA funds may require a terms adjustment from publishers in order for libraries to get the full benefit of those licenses.
In a notice that went out to library customers on April 20, following conversations with IMLS officials, state librarians, and publishers, OverDrive explained that while IMLS has advised that licensing digital content is an acceptable use of ARPA funding, the agency also concluded that "metered" e-book access (licenses that apply lend or time limits on circulation) may be categorized as a “service” rather than as a “materials” purchase. As such, because ARPA funds issued through IMLS must be used within a 16-month window (from June 1, 2021 through September 30, 2022), some of the lend-limited or time-limited licenses currently offered by publishers may not fully qualify under ARPA if the license term extends beyond the September 30, 2022 deadline for using ARPA funds distributed through IMLS.
“When we learned that the [metered access] 24-month model might either be rejected for library use of ARPA funds or risk that 33% or more of the amount allocated to 24-month titles might not qualify, we reached out to publishers to request their collaboration in finding a solution that supports use of ARPA funds,” OverDrive reported in a notice sent to library customers, with the vendor asking that publishers offer libraries 16-month pro-rated licenses as a work-around. This “ARPA-Prorated Metered Access Model” would be in addition to current library models, the guidance explains, and would not replace or eliminate any current models.
Penguin Random House, which has been offering one year 50% pro-rated e-book licenses to libraries since the pandemic began in March of 2020 (as a flexible alternative to its standard two year license) quickly agreed to offer an ARPA pro-rated option, OverDrive officials say. There has been no word yet from the remaining Big Five publishers as of press time.
Meanwhile, the guidance also explains, libraries are free to use ARPA funds for digital content purchases under a range of other qualifying models without restriction, including perpetual access titles circulated under the one copy/one user model and titles licensed under the cost-per-circulation and simultaneous access models, as long as the licensed use takes place within the 16-month window specified in the law.
Further, in an email, ALA Inouye, ALA Senior Director, Public Policy & Government Relations, clarified that while the September, 2022, expenditure deadline applies to ARPA funds issued to IMLS, it does not necessarily apply to the billions more in ARPA funding available to states and localities for which e-books could qualify as an expense. Those purchases, Inouye told PW, would likely have until 2024 to be expended.
Signed into law in March, the $1.9 trillion American Rescue Plan Act included an additional $200 million in funding to be distributed as grants through the IMLS to state library agencies. The pandemic relief funds issued through IMLS can be used from June 2021 through September of 2022 for a variety of products and services, including content and media purchases, though libraries will have to report on their use of funds at the end of the ARPA term.
"State and territory library agencies are working quickly and diligently to develop and implement plans for funding available through ARPA, with an emphasis on staying true to the intentions behind it, and maximizing its impact on local circumstances and needs," Tim Cherubini, executive director of COSLA (Chief Officers of State Library Agencies), told PW. "Digital content could certainly be a part of any given agencies’ strategy but it was immediately evident that alignment is lacking between certain licensing options and some parameters of the funding. COSLA appreciates the dialog...and the continued guidance from IMLS, the expertise and proactiveness of OverDrive, and the quick response by Penguin Random House. We hope other publishers will also respond positively."
Clarification: the article was amended to clarify that the 16-month window expiring in September, 2022, applies to ARPA funds issued to IMLS.