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Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations 4393
<br /> including the requirement that (e.g.,professional certification, or acceptable levels of practice, or
<br /> responses are related and reasonably licensure,and/or robust in-house otherwise are determined to be
<br /> proportional to the harm or impact training),that hire local workers and/or generally acceptable by the design and
<br /> identified.As part of that assessment, workers from historically underserved construction industry.
<br /> these recipients may also be asked to communities,and who directly employ Further, as with all other uses of
<br /> complete a Written Justification. their workforce or have policies and funds under the SLFRF program,the
<br /> Recipients (other than Tribal practices in place to ensure contractors Uniform Guidance at 2 CFR part 200
<br /> governments)are subject to the and subcontractors meet high labor applies to capital expenditures unless
<br /> following presumptions for the Written standards. Treasury further encourages stated otherwise. Importantly,this
<br /> Justification of the capital expenditure, recipients to prioritize employers includes 2 CFR part 200 Subpart D on
<br /> based on the total expected capital (including contractors and post-federal award requirements,
<br /> expenditures of the project: subcontractors)without recent including property standards pertaining
<br /> • Projects with total expected capital violations of federal and state labor and to insurance coverage,real property,
<br /> expenditures of under$1 million: employment laws. and equipment;procurement standards;
<br /> Treasury provides a safe harbor for Treasury believes that such practices sub-recipient monitoring and
<br /> unenumerated projects with total will promote effective and efficient management; and record retention and
<br /> expected capital expenditures of under delivery of high-quality projects and access.
<br /> $1 million and will not require support the economic recovery through Definitions
<br /> recipients to complete,submit, or meet strong employment opportunities for
<br /> the substantive requirements of a workers. Such practices will reduce Treasury adopts several definitions
<br /> Written Justification of the capital likelihood of potential project from the Uniform Guidance at 2 CFR
<br /> expenditure.Recipients should still challenges like work stoppages or safety 200.1 under this section,including for
<br /> make a determination as to whether the accidents,while ensuring a reliable capital expenditures, capital assets,
<br /> capital expenditure is part of a response supply of skilled labor and minimizing equipment,and supplies.
<br /> that is related and reasonably disruptions, such as those associated Per the Uniform Guidance,the term
<br /> proportional to the public health with labor disputes or workplace cc expenditures"means
<br /> emergency or its negative economic injuries. That will,in turn,promote on- expenditures to acquire capital assets
<br /> impacts. time and on-budget delivery. or expenditures to make additions,
<br /> • Projects with total expected capital Furthermore,among other improvements,modifications,
<br /> expenditures oft million or over: requirements contained in 2 CFR 200, replacements,rearrangements,
<br /> Recipients should complete a Written Appendix II, all contracts made by a reinstall ations,renovations, or
<br /> Justification of the capital expenditure recipient or subrecipient in excess of alterations to capital assets that
<br /> and make an independent assessment $100,000 with respect to a capital materially increase their value or useful
<br /> expenditure that involve employment of life."The term"capital assets"means
<br /> that their proposed capital expenditure
<br /> meets the substantive requirements of mechanics or laborers must include a "tangible or intangible assets used in
<br /> the Written Justification. Further, provision for compliance with certain operations having a useful life of more
<br /> recipients will be asked to submit the provisions of the Contract Work Hours than one year which are capitalized in
<br /> Written Justification as part of regular and Safety Standards Act,40 U.S.C. accordance with [Generally Accepted
<br /> reporting to Treasury. 3 702 and 3 704,as supplemented by Accounting Principles]."
<br /> Treasury employs arisk-based Department of Labor regulations (29 Capital assets include lands,facilities,
<br /> approach to overall program CFR part 5). equipment,and intellectual property.
<br /> management and monitoring,which Treasury will seek information from Equipment means"tangible personal
<br /> may result in heightened scrutiny on recipients on their workforce plans and property (including information
<br /> larger projects.Accordingly,recipients practices related to capital expenditures technology systems)having a useful life
<br /> pursuing projects with larger capital undertaken under the public health and of more than one year and aper-unit
<br /> expenditures should complete more negative economic impacts eligible use acquisition cost which equals or
<br /> category with SLFRF funds. This exceeds the lesser of the capitalization
<br /> detailed analyses for their Written
<br /> Justification, commensurate with the reporting will support transparency and level established by the non-Federal
<br /> scale of the project. competition by enhancing available entity for financial statement purposes,
<br /> information on the services being or$5,000." Supplies,which means all
<br /> Additional Provisions, Standards, and provided. tangible personal property other than
<br /> Definitions Environmental,Uniform Guidance, and those included as "equipment,"are not
<br /> Strong Labor Standards in Construction Other Generally Applicable considered capital expenditures.
<br /> Requirements Recipients may also use SLFRF funds
<br /> Treasury encourages recipients to q for pre-project development costs that
<br /> carry out projects in ways that produce Treasury cautions that, as is the case are tied to or reasonably expected to
<br /> high-quality work, avert disruptive and with all projects using SLFRF funds,all lead to an eligible capital expenditure.
<br /> costly delays,and promote efficiency. projects must comply with applicable For example,pre-project costs
<br /> Treasury encourages recipients to use federal, state, and local law. In the case associated with planning and
<br /> strong labor standards,including project of capital expenditures in particular, engineering for an eligible project are
<br /> labor agreements (PLAs) and this includes environmental and considered an eligible use of funds.
<br /> community benefits agreements that permitting laws and regulations.
<br /> offer wages at or above the prevailing Likewise,as with all capital expenditure c.Distinguishing Subrecipients Versus
<br /> rate and include local hire provisions. projects using the SLFRF funds,projects Beneficiaries
<br /> Treasury also recommends that must be completed in a manner that is Under the interim final rule, state,
<br /> recipients prioritize in their technically sound,meaning that it must local,and Tribal governments that
<br /> procurement decisions employers who meet design and construction methods receive a federal award directly from a
<br /> can demonstrate that their workforce and use materials that are approved, federal awarding agency, such as
<br /> meets high safety and training standards codified,recognized,fall under standard Treasury, are designated as "recipients,"
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