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4370 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations
<br /> workers during the pandemic.178 The the recipient concurrently expands toward making a trust fund deposit or
<br /> interim final rule also posed the benefits. Finally,one commenter repaying principal on Title XII advances
<br /> question of what, if any,conditions suggested a cap on the amount of funds under the interim final rule, such as the
<br /> should be considered to ensure that that can be used for this purpose. legislative appropriation of funds for
<br /> funds used under this eligible use Treasury Response:Inclusion as an this purpose, even if a formal obligation
<br /> category repair economic impacts of the Eligible Use and Conditions:In the final has not occurred,Treasury will exercise
<br /> pandemic and strengthen rule,Treasury is maintaining the enforcement discretion to not pursue
<br /> unemployment insurance systems. inclusion of this eligible use category. violations of this final rule provision
<br /> Public Comment:Inclusion as an Because unemployment insurance trust (i.e.,the requirement not to reduce
<br /> Eligible Use and Conditions: funds directly fund benefits to benefits) for recipients that have
<br /> Commenters expressed mixed unemployed workers,maintaining the appropriated funds for this purpose
<br /> perspectives on this eligible use solvency of the trust fund is critical to prior to the date of adoption of the final
<br /> category. Some commenters supported the continued provision of assistance to rule consistent with the laws and
<br /> its inclusion,arguing that unemployed workers. Further,funds procedures in their jurisdiction.
<br /> unemployment insurance systems have deposited into the trust fund must be Recipients should refer to Treasury's
<br /> faced significant costs to support used as assistance to unemployed Statement Regarding Compliance with
<br /> unemployed workers during the workers,an eligible use of SURF funds. the Coronavirus State and Local Fiscal
<br /> pandemic and that this constitutes a Finally,while,in the absence of the Recovery Funds Interim Final Rule and
<br /> negative economic impact that SURF SURF,trust fund deposits would likely Final Rule,which provides additional
<br /> funds should be able to address. Other be funded through increases on detail on these issues.
<br /> commenters opposed this eligible use employer payroll taxes,the eligibility of public Comment and Treasury
<br /> category,arguing that funds used under uses of SURF funds does not depend Response: Technical Corrections and
<br /> this category may not ultimately support on how obligations would otherwise be Amendments:Following the interim
<br /> unemployed workers. Some satisfied if the SURF were not available final rule,Treasury received recipient
<br /> commenters noted that unemployment for this use. questions on whether paying interest on
<br /> insurance taxes on businesses While deposits to unemployment advances received under Title XII of the
<br /> automatically increase when trust fund insurance trust funds generally serve as Social Security Act(42 U.S.C. 1321) is
<br /> balances are low and suggested that assistance to unemployed workers, an eligible use of SURF funds;Treasury
<br /> permitting the deposit of funds into recipients that make deposits but also is clarifying that such use is
<br /> unemployment insurance trust funds cut unemployment insurance benefits to permissible, consistent with Treasury's
<br /> prevents a tax increase on businesses, workers substantially decrease the treatment of the eligibility of interest on
<br /> some of which may not have faced likelihood that the deposited funds will Title XII advances under the
<br /> negative economic impacts from the assist unemployed workers. In other Coronavirus Relief Fund.
<br /> pandemic,rather than providing words, SURF funds deposited into an
<br /> assistance to unemployed workers. unemployment insurance trust fund Treasury is further clarifying that
<br /> Other comments suggested that deposits generally serve as assistance to recipients may only use SURF funds
<br /> are better thought of as savings for unemployed workers,unless recipients for contributions to unemployment
<br /> future needs than assistance to take policy actions that substantially insurance trust funds and repayment of
<br /> unemployed workers in the near term. decrease the extent to which SURF the principal amount due on advances
<br /> Responding to the interim final rule's funds would flow to unemployed received under Title XII of the Social
<br /> question, several commenters suggested workers.As such,through December 31, Security Act up to an amount equal to
<br /> that,if Treasury maintains this eligible 2024,recipients that deposit SURF (i)the difference between the balance in
<br /> use,the final rule should require funds into an unemployment insurance the recipient's unemployment insurance
<br /> detailed reporting on funds used under trust fund or use SURF funds to repay trust fund as of January 27, 2020 and the
<br /> this category or place conditions on this principal on Title XII advances,may not balance of such account as of May 17,
<br /> category to increase the likelihood that take action to reduce benefits available 2021,plus (ii)the principal amount
<br /> funds ultimately support unemployed to unemployed workers by changing the outstanding as of May 17, 2021 on any
<br /> workers. For example, some computation method governing regular advances received under Title XII of the
<br /> commenters suggested that recipients unemployment compensation in a way Social Security Act between January 27,
<br /> that deposit SURF funds into their trust that results in a reduction of average 2020 and May 17, 2021. Further,
<br /> fund should be barred from cutting weekly benefit amounts or the number recipients may use SURF funds for the
<br /> unemployment insurance benefits for of weeks of benefits payable (i.e.,the payment of any interest due on such
<br /> workers during the period of maximum benefit entitlement). Title XII advances.In other words,
<br /> performance or from erecting new Finally,until the final rule becomes excluding interest due on Title XII
<br /> barriers to accessing benefits (e.g., effective on April 1, 2022,the interim advances,the magnitude of the decrease
<br /> through the application process and final rule remains binding and of the balance in the unemployment
<br /> ongoing requirements to receive effective.179 These requirements were insurance trust fund plus the principal
<br /> benefits). One commenter,noting that not in effect under the interim final rule outstanding on any Title XII borrowings
<br /> unemployment insurance benefits often and do not apply to funds used(i.e., made from the beginning of the public
<br /> provide low rates of wage replacement obligated or expended)under the health emergency to the date of
<br /> and do not cover some types of interim final rule while it is in effect.In publication of the SURF interim final
<br /> unemployed workers,argued that addition,recognizing that some rule sets a cap on the amount of SURF
<br /> recipients should not be permitted to recipients have taken significant steps funds a recipient may use for trust fund
<br /> deposit funds into the trust fund unless contributions and repayment of
<br /> 179 See,e.g.,U.S.Department of the Treasury, principal on Title XII advances.Further,
<br /> 178 Note that,while the economic harm being More Information on the Conclusion of the Public a recipient that deposits SURF funds
<br /> addressed accrued before March 3,2021,the cost Comment Period and the Interim Final Rule on the into its unemployment insurance trust
<br /> incurred to address the harm occurs after March 3, Coronavirus State and Local Fiscal Recovery Funds,
<br /> 2021 and provides assistance to unemployed https:llhome.treasury.gov/system/filesll3611FR- fund to fully restore the pre-pandemic
<br /> workers,an eligible use of SLFRF funds. Explainer.pdf. balance may not draw down that
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