Agenda - Council Work Session - 03/08/2022

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4434 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations meaning that they have over three years government. For example, county A recipient may transfer funds to a to obligate and over five years to expend may transfer SLFRF funds to county B government outside its boundaries (e.g., funds. This provides a sufficient amount as long as county B abides by the use county transfers to a neighboring of time for recipients to plan and restrictions applicable to county A and county),provided that the transferor can execute projects. the transfer would constitute an eligible document that the transfer constitutes D. Transfers of Funds use of the funds by county A. County A an eligible expense of the transferor must receive a benefit proportionate to government and that its jurisdiction Under section 602(c)(3) of the Social the amount transferred. receives a benefit proportionate to the Security Act,a state,territory,or Tribal As detailed in the interim final rule amount transferred. government may transfer SLFRF funds Supplementary Information, once to a"private nonprofit organization. . • transfers are received,the transferee Blending and Braiding of Funds a Tribal organization. . . a public must abide by the restrictions on use Treasury is clarifying in the final rule benefit corporation involved in the applicable to the transferor under the that, consistent with further guidance transportation of passengers or cargo,or ARPA and other applicable law, issued by Treasury following the a special-purpose unit of state or local regulations,and program guidance. interim final rule,376 recipients may government." Similarly, section Further,the transferor remains fund a project with both SLFRF funds 603(c)(3) authorizes a local government responsible for monitoring and and other sources of funding,provided to transfer SLFRF funds to the same that the costs are eligible costs under overseeing the subrecipient s use of g entities (other than Tribal SLFRF funds and other activities related each source program and are compliant organizations). Separately,section to the award to ensure that the with all other related statutory and 603(c)(4) authorizes a local government subrecipient complies with the statutory regulatory requirements and policies. to transfer SLFRF funds to the state in and regulatory requirements and the The recipient must comply with which it is located. Award Terms and Conditions. applicable reporting requirements for all Entities Eligible for a Transfer Under Recipients also remain responsible for sources of funds supporting the SLFRF Sections 602(c)(3) and 603(c)(3) reporting to Treasury on their projects and with any requirements and subrecipients'use of payments from the restrictions on the use of funds from the Regarding transfers permitted under supplemental funding sources and the sections 602(c)(3) and 603(c)(3) of the SLFRF for the duration of the award. SLFRF program. Specifically, Act,the interim final rule Pooling Funds • All funds provided under the Supplementary Information clarified Public Comment:Several commenters SLFRF program must be used for that the lists of transferees in these asked for clarification about whether projects, investments, or services that sections are not exclusive and that state, are eligible under the SLFRF program. local,territorial, and Tribal governments they may pool SLFRF funds for a project SLFRF funds may not be used to fund may transfer funds to other constituent with other recipients,including when y doing so involves a transfer to another an activity that is not,in its entirety,an units of government or private entities entity, eligible use under the SLFRF program. beyond those specified in the statute. such as a regional organization or For example: Public Comment:Several commenters government that undertakes projects on o SLFRF funds may be used in supported Treasury's interpretation of behalf of a number of local conjunction with other sources of funds 602e transferees in sections eligible 602(c)(3) governments. Commenters also asked g ( )( ) for clarification on the oversight and to make an investment in water and 603(c)(3) as nonexclusive. However, reporting obligations that would result infrastructure that is eligible under many commenters asked for greater p g g section 602 or 603 of the Social Security clarity as to whether specific entities not from such transfers. Act and the final rule. listed in Treasury's examples of eligible Treasury Response:Consistent with o SLFRF funds could not be used to guidance issued following the interim subrecipients,such as nonprofits and final rule,375 the final rule clarifies that fund the entirety of a water Tribal governments,were eligible pool SLFRF funds for Infrastructure project that was partially, recipients may transferees. One commenter also asked p y p although not entirely, an eligible use whether a recipient may transfer SLFRF projects,provided that the project is under Treasury's final rule.However, funds to a higher level of government, Itself an eligible use of SLFRF funds for the recipient could use SLFRF funds such as a locality to the county in which each recipient that is contributing to the only for a smaller component project it is located. pool of funds and that recipients are that does constitute an eligible use, Treasury Response:The final rule able to track the use of funds in line while using other funds for the clarifies that,in addition to the entities with the reporting and compliance remaining portions of the larger planned enumerated in sections 602(c)(3) and requirements of the SLFRF.In general, water infrastructure project that do not 603(c)(3),recipients may transfer SLFRF when pooling funds for regional constitute an eligible use. In this case, funds to any entity to carry out as a projects,recipients may expend funds the"project"for SLFRF purposes under subrecipient an eligible use of funds by directly on the project or transfer funds this program would be only the eligible the transferor,as long as they comply to another government or other entity use component of the larger project. with the Award Terms and Conditions that is undertaking the project on behalf . In addition,because SLFRF funds and other applicable requirements, of multiple recipients. To the extent must be obligated by December 31, including the Uniform Guidance at 2 recipients undertake regional projects 2024,and recipients must expend all CFR 200.331-200.333. Eligible via transfer to another organization or funds under the award no later than subrecipients include,but are not government,recipients would need to December 31, 2026,recipients must be limited to,other units of government comply with the rules on transfers able to,at a minimum, determine and (including Tribal governments), specified in the final rule report to Treasury on the amount of nonprofits and other civil society SUPPLEMENTARY INFORMATION.A SLFRF funds obligated and expended organizations,and private entities. and when such funds were obligated Further,the final rule clarifies that 375 Coronavirus State and Local Fiscal Recovery and expended. Funds,Frequently Asked Questions,as of July 19, transfers may be made to both 2021;https:llhome.treasury.gov/system/files/1361 constituent or non-constituent units of SLFRPFAQ.pdf. 376 See FAQ 4.10.Id.