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4442 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations
<br /> public comments suggested potential communities,on the basis that counterfactual trend representing what
<br /> expansions of uses,including shifting associated projects would only respond could have plausibly been expected to
<br /> enumerated eligible uses for to disproportionate impacts of the occur in the absence of the pandemic.
<br /> disproportionately impacted pandemic depending on the specific The counterfactual trend begins with
<br /> communities to serve a broader issue addressed. In sum,Treasury the last full fiscal year prior to the
<br /> population of impacted communities. expanded enumerated eligible uses public health emergency(as required by
<br /> Taking these comments into account, while retaining a focus on broadly statute) and projects forward with an
<br /> Treasury generally took this approach, experienced impacts of the pandemic. annualized growth adjustment. Treasury
<br /> in anticipation that the benefits of the Treasury anticipates that this will give has made several adjustments in the
<br /> program will increase while recipient recipients further flexibility to presume final rule to decrease administrative
<br /> administrative costs in identifying and eligibility and respond to pandemic burden,reducing costs for recipients,
<br /> justifying non-enumerated uses of funds impacts without increasing while still accurately capturing
<br /> will decrease. administrative burden. reductions in revenue due to the
<br /> Specifically,Treasury added Capital Expenditures:In the interim pandemic.
<br /> enumerated eligible uses for impacted final rule,Treasury permitted funds to Under the interim final rule,Treasury
<br /> populations including paid sick, be used for a limited number of capital specified that recipients calculate
<br /> medical,or family leave;health expenditures mostly related to the revenue loss on a calendar year basis.In
<br /> insurance subsidies; and services for the COVID-19 public health response. This this final rule,Treasury is providing
<br /> unbanked and underbanked,on the decision granted recipients some recipients the option to calculate
<br /> basis that impacts of the pandemic that discretion to use SLFRF funds to revenue loss on a calendar year or fiscal
<br /> were broadly experienced by many address COVID-19 prevention and year basis,which will allow recipients
<br /> communities would be addressed by mitigation through certain investments the administrative flexibility to
<br /> these uses. Treasury also shifted some in equipment,real property,and minimize administrative burdens based
<br /> eligible uses,formerly restricted only to facilities,which Treasury recognized as on the data available to them.
<br /> disproportionately impacted critical components of the public health Treasury's decision to incorporate a
<br /> communities,to impacted communities. response. In the final rule, Treasury growth adjustment into the calculation
<br /> These uses included community considered maintaining the provisions of revenue loss ensures that the formula
<br /> violence intervention, assistance in the interim final rule or expanding more fully captures revenue shortfalls
<br /> accessing or applying to public benefits allowable capital expenditures to relative to recipients'pre-pandemic
<br /> and services,affordable housing provide recipients greater flexibility to expectations.Recipients will have the
<br /> development, and services to promote pursue other capital investments that opportunity to calculate revenue loss at
<br /> healthy childhood environments like are responsive to the public health several points throughout the program,
<br /> childcare and early learning.These uses emergency and its negative economic recognizing that some recipients may
<br /> were shifted on the basis that the impacts.While expanding allowable experience revenue effects with a lag.
<br /> associated impacts of the pandemic capital expenditures may increase the This option to re-calculate revenue loss
<br /> were experienced by a broader risk that recipients will undertake large on an ongoing basis is intended to result
<br /> population, and responses are, expenditures that do not sufficiently in more support for recipients to avoid
<br /> accordingly, eligible to benefit a broader address intended harms, or address harmful cutbacks in future years. In
<br /> population. harms in a less cost-efficient manner calculating revenue loss,recipients will
<br /> Additionally,the final rule clarified than an alternative investment(e.g., a look at general revenue in the aggregate,
<br /> that investments in parks and other program or service), expanding rather than on a source-by-source basis,
<br /> public outdoor recreation spaces are allowable capital expenditures would given that recipients may have
<br /> enumerated eligible uses for likely help fill critical gaps in experienced offsetting changes in
<br /> disproportionately impacted recipients'response to the pandemic revenues across sources. The final rule
<br /> communities. In including these uses, and provide equipment and facilities also provides for removing the impact of
<br /> Treasury took into account evidence on that generate benefits beyond SLFRF's tax increasing or decreasing changes,
<br /> the social determinants of health, or the period of performance. To preserve which affect the amount of revenue
<br /> ways that social context,like the flexibility while mitigating risks,the collected but are not"due to"the
<br /> neighborhood built environment, final rule allows recipients to undertake pandemic,from the calculation of
<br /> impacts health outcomes.By taking a an expanded set of capital expenditures revenue loss due to the public health
<br /> more holistic approach to public health, while requiring additional written emergency. Both of these components of
<br /> the final rule allows recipients to justifications for projects with an Treasury's approach provide a more
<br /> respond more broadly to factors that expected total cost at or over$1 million. accurate representation of the effect of
<br /> contributed to the pandemic's health Treasury believes this approach the pandemic on overall revenues.
<br /> impacts and more fully mitigate those balances the implementation of Revenue Loss Standard Allowance:In
<br /> health impacts. appropriate risk-based compliance addition to largely preserving the
<br /> To balance administrative flexibility requirements and the provision of formula to calculate revenue loss from
<br /> with a maintenance of focus on impacts administrative convenience for smaller the interim final rule,Treasury also
<br /> of the pandemic,Treasury considered, capital expenditures,while generally added an alternative "standard
<br /> but did not include,other proposed allowing recipients the flexibility to allowance" option for the revenue loss
<br /> enumerated uses that did not respond to undertake a greater variety of responsive calculation to this final rule. Treasury's
<br /> the impacts of the pandemic or capital expenditures. decision to elect to allow a fixed amount
<br /> responded to impacts that were not of loss that can be used to fund
<br /> experienced generally across the Revenue Loss "government services"allows recipients
<br /> country by many jurisdictions and Revenue Loss Formula:In this final the flexibility to use minimal
<br /> populations. For example,Treasury did rule,Treasury's approach to revenue administrative capacity on the
<br /> not include pollution remediation loss allows recipients to compute the calculation if desired. The decision also
<br /> broadly,a proposed enumerated eligible extent of reduction in revenue by benefits recipients by allowing them to
<br /> use for disproportionately impacted comparing actual revenue to a avoid expending administrative
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