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4440 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations
<br /> understand the requirements and approach that sets clear guidelines on rule. In particular,eligible uses include
<br /> parameters of the program as set forth in eligible uses of SLFRF funds and hiring up to a pre-pandemic baseline
<br /> the statute and deploy funds in a provides state,local,and Tribal that is adjusted for historic
<br /> manner that best reflects Congress' government officials discretion within underinvestment in the public sector by
<br /> mandate for targeted fiscal relief. This those eligible uses to direct SLFRF allowing funds to be used to pay for
<br /> final rule governs the use of$350 billion funds to areas of greatest need within payroll and covered benefits associated
<br /> in grant funds from the federal their jurisdiction.While preserving with the recipient increasing its number
<br /> government to states,territories,Tribal recipients' overall flexibility,the final of employees up to 7.5 percent above its
<br /> governments,and localities,generating rule includes several provisions that pre-pandemic baseline.Eligible uses
<br /> a significant macroeconomic effect on implement statutory requirements and also include providing additional funds
<br /> the U.S. economy. Treasury has sought will help support use of SLFRF funds to for employees who experienced pay
<br /> to implement the program in ways that achieve the intended benefits. cuts or were furloughed,avoiding
<br /> maximize its potential benefits while Preserving flexibility for recipients not layoffs,providing worker retention
<br /> minimizing its costs. It has done so by: only serves an important public policy incentives, and paying for ancillary
<br /> aiming to target relief in key areas goal by allowing them to meet administrative costs related to hiring.
<br /> according to the congressional mandate; particularized and diverse needs of their Treasury believes this expanded
<br /> offering clarity to states,territories, local communities but also enhances the approach,relative to the interim final
<br /> Tribal governments,and localities while economic benefits of the final rule by rule,provides useful flexibility to
<br /> maintaining their flexibility to respond allowing recipients to choose eligible recipients,which may increase a state or
<br /> to local needs; and limiting uses of funds that provide the highest local government's ability to effectively
<br /> administrative burdens. utility in their jurisdictions. deliver services to its residents. While
<br /> Analysis of Benefits In implementing the ARPA,Treasury the interim final rule already explicitly
<br /> has also prioritized supporting permitted using funds to restore
<br /> Relative to a pre-statutory baseline, underserved communities that have recipients'workforces up to pre-
<br /> the SLFRF funds provide a combined been disproportionately impacted by the pandemic levels,the final rule's
<br /> $350 billion to state, local, and Tribal pandemic.The SLFRF program as inclusion of an upward adjustment
<br /> governments for fiscal relief and support implemented by the final rule provides factor recognizes that,as the population
<br /> for costs incurred responding to the even greater flexibility to recipients for or economy of a jurisdiction grows over
<br /> COVID-19 pandemic. Treasury believes uses of funds in underserved time,more workers are generally needed
<br /> that this transfer will generate communities,recognizing that pre- to effectively meet responsibilities. It
<br /> substantial additional economic existing health and economic disparities also provides recipients greater room to
<br /> activity, although given the flexibility in these communities amplified the employ funds toward building back the
<br /> accorded to recipients in the use of impact of the pandemic there.In public sector workforce after years of
<br /> funds,it is not possible to precisely general,investments in improving chronic underinvestment since the
<br /> estimate the extent to which this will health outcomes and economic Great Recession. Treasury arrived at the
<br /> occur and the timing with which it will opportunities provide high economic 7.5 percent adjustment factor through an
<br /> occur.Economic research has returns, so this approach is likely to analysis of data from the Bureau of
<br /> demonstrated that state fiscal relief is an achieve substantial near-term economic Labor Statistics on state and local
<br /> efficient and effective way to mitigate and public health benefits,in addition government employment and data from
<br /> declines in jobs and output during an to the longer-term benefits arising from the Census Bureau on population to
<br /> economic downturn.390 Absent such the allowable investments in water, estimate the extent of underinvestment
<br /> fiscal relief,fiscal austerity among state, sewer,and broadband infrastructure. in the public sector since the onset of
<br /> local,and Tribal governments could The remainder of this section clarifies the Great Recession.While Treasury
<br /> exert a prolonged drag on the overall how Treasury's approach to key considered a range of methodologies
<br /> economic recovery,as occurred provisions in the final rule will and point estimates to set the
<br /> following the 2007-2009 recession.391 contribute to greater realization of adjustment factor,a 7.5 percent factor
<br /> This final rule provides benefits benefits from the program. errs on the side of recipient flexibility.
<br /> across several areas by implementing public Health and Negative Economic Treasury believes this adjustment
<br /> the four eligible use categories,as Impacts enhances recipients ability to identify
<br /> defined in statute: strengthening the and meet the particularized needs of
<br /> response to the COVID-19 public health The eligible use category for their communities. Treasury also
<br /> emergency and its negative economic responding to the public health and believes that the additional enumerated
<br /> impacts;replacing lost revenue to ease negative economic impacts of the eligible uses for supporting the
<br /> fiscal pressure on state,local, and Tribal pandemic covers a wide range of workforce provide recipients several
<br /> governments that might otherwise lead eligible uses of funds. Treasury means to help retain current workers,
<br /> to harmful cutbacks in employment or addresses several key uses of funds in decreasing turnover costs.
<br /> government services;providing this analysis,as well as ways that Identifying Eligible Populations
<br /> premium pay to essential workers; and Treasury has structured this eligible use
<br /> making necessary investments in water, to minimize recipient administrative Treasury has provided several
<br /> sewer,and broadband infrastructure. burden while also maintaining targeting methods for recipients to identify
<br /> These benefits are achieved in the of the funding to entities that households,populations,and
<br /> final rule through a broadly flexible experienced negative impacts from the communities eligible for services that
<br /> pandemic. respond to the public health and
<br /> 39O See,e.g.,Gabriel Chodorow-Reich et al.,Does Government Employment:In order to negative economic impacts of the
<br /> state Fiscal Relief During Recessions Increase bolster the government's ability to pandemic. In general,these methods
<br /> Employment?Evidence from the American effectively administer services,the final seek to provide recipients options to
<br /> Recovery and Reinvestment Act,4 American
<br /> Economic Journal 118-145(2012)http://dx.doi.org/ rule allows for a broader set of eligible identify eligible populations with
<br /> 10.1257/po1.4.3.118. uses to restore and support public sector minimal administrative burden,while
<br /> 391 See,e.g.,Fitzpatrick,supra note 278. employment relative to the interim final also maintaining targeting of the funds
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