Agenda - Council Work Session - 03/08/2022

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4404 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations transfers from the federal government, whole for past expenditures, and one- revenue (e.g.,property taxes),these are including transfers made pursuant to time revenues such as revenue from the not uncommon sources of revenue for section 9901 of the ARPA.290 In the case sale of property. recipients,and their inclusion provides of Tribal governments,it also included Treasury Response:In the final rule, a more complete view of the financial revenue from Tribal business Treasury has maintained the definition health of a recipient government and is enterprises. of"general revenue"from the interim consistent with the Census Bureau Public Comment:Many commenters final rule with two exceptions. methodology. Treasury is also asked Treasury to include certain items Treasury has adjusted the definition maintaining the exclusion of all in the definition of"general revenue." to allow recipients that operate utilities payments from the federal government For instance,several commenters that that are part of their own government to (including payments for services) from operate their own utilities asked that choose whether to include revenue from general revenue in order to avoid revenue from utilities be included, these utilities in their revenue loss substantial dilution of the definition of arguing that declines in utility revenue calculation. This change responds to revenue, particularly in light of directly affect contributions to their comments from recipients indicating extraordinary fiscal support provided general funds.Many of these that revenue from utilities is used to during the pandemic. Treasury is commenters noted that moratoriums on fund other government services and that maintaining the inclusion of utility shutoffs and a decline in utility revenues have declined on intergovernmental transfers other than collections have resulted in significant aggregate. This approach is consistent from the federal government for the budgetary pressures. with other eligible uses,which reasons provided in the Supplemental Some commenters also asked for the recognize decreased ability of many Information to the interim final rule;to exclusion of certain intergovernmental households to make utility payments; do otherwise would be to significantly transfers in the definition of general see section Assistance to Households, distort the revenue calculations for local revenue,including transfers of shared which identifies utility assistance as an governments that regularly receive revenue from the state.291 Other enumerated eligible use of funds, revenue sharing payments,for example, commenters asked for the inclusion of including through direct or bulk from their state governments. Treasury certain transfers from the federal payments to utilities for consumer is also maintaining the approach that government,including fees paid for assistance. Furthermore,for utilities or "general revenue"includes revenue services and i rants that are,in effect, other entities (e.g., certain service g from Tribal enterprises. This approach paid for the provision of services. districts)that are not part of the recognizes that these enterprises often Treasury also received multiple recipient government, a transfer from form the revenue base for Tribal requests to include revenue from Tribal the utility to the recipient constitutes an governments'budgets. enterprises in the definition of"general intergovernmental transfer and therefore revenue"and that"Tribal enterprise"be is included in the definition of"general To ease the burden on recipients and defined broadly. Others asked for the revenue."293 account for anomalous variations in ability to choose whether to include Treasury has also added liquor store revenue, as mentioned above,Treasury revenue from Tribal enterprises. revenue to the definition of general has incorporated a standard Finally, some commenters requested revenue. The Supplemental Information allowance option into the final rule. A that the definition of general revenue to the interim final rule stated that the recipient may choose to use the exclude certain sources of revenue, such definition of tax revenue would include standard allowance,which under the as revenue sources that do not support q final rule is set at u to$10 million,not liquor store revenue,but the text of the p a general fund(i.e.,revenue sources that rule did not include it. Accordingly,in to exceed the recipient's SLFRF award are restricted in use). Commenters also the final rule,Treasury is clarifying that amount, as an alternative to calculating asked that general revenue exclude revenue includes liquor store revenue. revenue loss according to the formula revenue from special assessments, However,Treasury believes revenue described above. This addition will settlements that make the recipient from government-owned liquor stores is promote administrative efficiency and better classified as general revenue than simplify the revenue loss calculation for 290The interim final rule stated that"general it is as tax revenue,so the final rule the vast majority of recipients. Treasury revenue"and"tax revenue"excludes refunds and includes it as part of general revenue. intends to amend its reporting forms to other correcting transactions.Instead of In response to requests that the provide a mechanism for recipients to "excluding"refunds and other correcting definition of general revenue exclude elect to utilize either the revenue loss transactions,the Census Bureau methodology upon which those definitions are based provides that revenue from special assessments, formula or the standard allowance, in general revenue and tax revenue are determined settlements that make the recipient addition to other changes made as part "net of"refunds and other correcting transactions. Whole for past expenditures, and one- of the final rule. The use of"excluding"in the interim final rule is time revenues such as revenue from the substantively the same as the Census Bureau sale of property,Treasury is maintaining Aggregate Revenue Loss Calculation methodology.However,to be consistent with the terminology used by the Census Bureau,the final its position in the final rule that such Under the interim final rule,revenue rule uses"net of"instead of"excluding."Current revenue is included in general revenue. loss was calculated based on aggregate charges are defined as"charges imposed for While such revenues may be less revenues and therefore loss in one type providing current services or for the sale of predictable than other sources of of revenue could be offset by gains in products in connection with general government activities."It includes revenues such as public another. The amount of SLFRF funds education institution,public hospital,and toll 292 U.S.Energy Information Administration, available to provide government revenues.Miscellaneous general revenue comprises Annual Electric Utility Data(October 2021), services was based on overall net of all other general revenue of governments from available at https://www.eia.gov/electricity/sales_ their own sources(i.e.,other than utility and revenue_price/. revenue loss. In the Supplementary insurance trust revenue),including rents,royalties, 293 FAQ 3.14 provides further guidance on how Information to the interim final rule, lottery proceeds,and fines. to determine what entities constitute a government Treasury asked commenters to discuss 291 The interim final rule excluded governmental for purposes of calculating revenue loss.See the advantages and disadvantages of, transfers from the Federal Government,but it did Coronavirus State and Local Fiscal Recovery Funds, and any potential concerns with,this not exclude intergovernmental transfers from other Frequently Asked Questions,as of July 19,2021; governmental units for purposes of the revenue loss https://home.treasury.gov/system/files/136/ approach,including circumstances in provisions. SLFRPFAQ.pdf. which it could be necessary or