Agenda - Council Work Session - 03/08/2022

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Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations 4341 underserved 14 communities,that pandemic,for disproportionately under this category,the recipient should amplified and exacerbated the impacts impacted communities. assess whether, and the extent to which, of the pandemic, also present continued The interim final rule established the there has been an economic harm,such barriers to full and equitable recovery. method to determine which specific as loss of earnings or revenue,that As state,local, and Tribal programs or services may be eligible to resulted from the COVID-19 public governments work to meet the public respond to the public health emergency health emergency and whether,and the health and economic needs of their or to respond to the negative economic extent to which,the use would respond communities,these governments are impacts of the public health emergency to or address this harm.17 A recipient also confronting the need to rebuild within this framework. The interim final should first consider whether an their own capacity. Facing severe rule included multiple enumerated uses economic harm exists and whether this budget challenges during the pandemic, that are eligible within each of these harm was caused or made worse by the many state,local, and Tribal categories when provided to eligible COVID-19 public health emergency." governments have been forced to make populations,including populations that The interim final rule went on to say cuts to services or their workforces, the interim final rule presumed to have that: "In addition,the eligible use must including cutting over 1.5 million jobs been impacted(in the case of public `respond to'the identified negative from February to May 2020, or delay health responses and responses to economic impact.Responses must be critical investments. As of fall 2021, negative economic impacts) or related and reasonably proportional to state,local, and Tribal government disproportionately impacted(in the case the extent and type of harm employment remained over 950,000 jobs of disproportionately impacted experienced;uses that bear no relation below pre-pandemic levels.15 In the communities). Finally,the interim final or are grossly disproportionate to the recovery from the Great Recession,cuts rule also allowed recipients to designate type or extent of harm experienced to state,local, and Tribal governments additional individuals or classes as would not be eligible uses." became a meaningful drag on economic impacted or disproportionately Throughout this final rule,Treasury growth for several years,and the SURF impacted. The standards for each of refers to households, communities, program provides the resources needed these criteria under the interim final small businesses,nonprofits, and to re-invest in vital public services and rule are discussed below. industries that experienced public workers to avoid this outcome.16 To assess whether a program or health or negative economic impacts of service would be eligible to respond to the pandemic as "impacted."The first 1. General Provisions: Structure and the public health emergency or its section in the interim final rule under Standards negative economic impacts,the interim this eligible use category included Background:Sections 602(c)(1)(A) final rule stated that, the recipient [is public health responses for these and 603(c)(1)(A) of the Social Security required] to,first,identify a need or impacted classes. The second category Act establish that recipients may use negative impact of the COVID-19 public in the interim final rule under this funds "to respond to the public health health emergency and,second,identify eligible use category included responses emergency with respect to COVID-19 or how the program, service, or other to the negative economic impacts that its negative economic impacts, intervention addresses the identified were experienced by these impacted including assistance to households, need or impact [. . .] [E]ligible uses classes as a result of the pandemic. small businesses, and nonprofits,or aid under this category must be in response The interim final rule further to impacted industries such as tourism, to the disease itself or the harmful recognized that certain populations travel,and hospitality."The interim consequences of the economic have experienced disproportionate final rule established three categories disruptions resulting from or health or negative economic impacts within this eligible use: (1)Public exacerbated by the,COVID-19 public during the pandemic, as pre-existing health responses for those impacted by health emergency. The enumerated disparities in these communities the pandemic,including the general eligible uses were presumed to meet this amplified the impacts of the pandemic. public; (2)responses to the negative criterion.With respect to uses not specifically For example,the interim final rule economic impacts that were enumerated in the interim final rule as recognized that the negative economic experienced by those impacted as a eligible public health responses,the effects of the pandemic were result of the pandemic,and(3) interim final rule stated that, "[t]o assess particularly pronounced among lower- additional services,either as a public whether additional uses would be income families,who were more likely health response or a response to the eligible under this category,recipients to experience income loss and more negative economic impacts of the should identify an effect of COVID-19 likely to have a fob that required an- on public health including either or person work. The interim final rule 14 Treasury uses"underserved"to refer to , recognized the role of pre-existing social populations sharing articular characteristic,as both of immediate effects or effects that po p g a p vulnerabilities and disparities in driving well as geographic communities,that have been may manifest over months or years,and systematically denied a full opportunity to assess how the use would respond to or the disparate health and economic participate in aspects of economic,social,and civic address the identified need." outcomes and presumed that programs life.In the interim final rule,Treasury generally designed to address these health or used the term"disadvantaged"to refer to these With respect to uses not specifically g enumerated in the interim final rule as economic disparities are responsive to same populations and communities. negative the public health or economic 15 u.S.Bureau of Labor Statistics,All Employees, eligible responses to a negative p impacts of the COVID-19 public health State Government[CES9092000001]and All economic impact of the public health Employees,Local Government[CES9093000001], emergency,the interim final rule stated emergency,when provided in retrieved from FRED,Federal Reserve Bank of St. that" disproportionately impacted Louis,https://fred.stlouisfed.org/series/ [e]ligible uses that respond to the CES9092000001 and https://fred.stlouisfed.org/ negative economic impacts of the public communities.In addition to identifying series/CES9093000001(last visited December 7, health emergency must be designed to certain populations and communities 2021). address an economic harm resulting 16 Tracy Gordon,State and Local Budgets and the 17 from or exacerbated by the public health In some cases,a use may be permissible under Great Recession,Brookings Institution(Dec.31, another eligible use category even if it falls outside 2012),http://www.brookings.edu/articles/state-and- emergency. In considering whether a the scope of section(c)(1)(A)of section 602 and 603 local-budgets-and-the-great-recession. program or service would be eligible of the Social Security Act.