Agenda - Council Work Session - 03/08/2022

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4344 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations the interim final rule. For clarity,the educational activities like extending experienced severe harm and in a much final rule re-articulates that when learning opportunities,among other larger amount to a group that assessing whether a program or service critical activities.In that case,the experienced relatively little harm. In is an eligible use to respond to the recipient would only need to identify a evaluating whether a use is reasonably negative economic impacts of the negative economic impact to the class of proportional,recipients should consider COVID-19 public health emergency, "households with children"and would relevant factors about the harm Treasury will consider the two not need to document or otherwise identified and the response. For eligibility requirements discussed demonstrate that each individual example,recipients may consider the below. household served experienced a size of the population impacted and the First,there must be a negative negative economic impact. severity,type, and duration of the economic impact, or an economic harm, Second,the response must be impact.Recipients may also consider experienced by an individual or a class. designed to address the identified the efficacy, cost, cost-effectiveness,and The recipient should assess whether, economic harm or impact resulting from time to delivery of the response. and the extent to which,there has been or exacerbated by the public health Finally,recipients should be aware of an economic harm, such as loss of emergency. In selecting responses,the the distinction between beneficiaries of earnings or revenue,that resulted from recipient must assess whether,and the funds and subrecipients;a recipient the COVID-19 public health emergency. extent to which,the use would respond may provide services to beneficiaries A recipient should first consider to or address this harm or impact. This through subrecipients that did not whether an economic harm exists and approach is consistent with the text of experience a negative economic impact, then whether this harm was caused or the statute,which provides that funds see section Distinguishing Subrecipients made worse by the COVID-19 public may be used to "respond to"the versus Beneficiaries. That is, a recipient health emergency. This approach is "negative economic impacts" of the may award SLFRF funds to an entity consistent with the text of the statute, public health emergency"including that did not experience a negative which provides that funds in this assistance to households, small economic impact in order to implement category must be used to"respond to businesses,and nonprofits, or aid to a program or provide a service to the public health emergency with impacted industries such as tourism, beneficiaries on its behalf. Such respect to . . .its negative economic travel,and hospitality."The list of transfers,when implementing a public impacts." potential responses ("assistance" or health or negative economic impact While economic impacts may either "aid") suggests that responses should response, should be responsive to and be immediate or delayed,individuals or address the "negative economic designed to benefit individuals, classes that did not experience a impacts" of particular types of households,small businesses, negative economic impact from the beneficiaries (e.g.,households or small nonprofits,or impacted industries that public health emergency would not be businesses). did experience a public health or eligible beneficiaries under this Responses must be reasonably negative economic impact. category.As noted above,the interim designed to benefit the individual or Determining the Appropriate Eligible final rule permitted recipients to class that experienced the negative Use Category presume that households that economic impact or harm. Uses of funds experienced unemployment,increased should be assessed based on their Public Comment:Some commenters food or housing insecurity, or are low- responsiveness to their intended expressed uncertainty about how to or moderate-income experienced a beneficiary and the ability of the analyze negative economic impacts to negative economic impact from the response to address the impact or harm different entities (e.g.,households, small pandemic.For discussion of the final experienced by that beneficiary.20 businesses,nonprofits). For example, rule's approach to this presumption, see Responses must also be related and commenters asked whether a nonprofit, section Populations Presumed Eligible. reasonably proportional to the extent which did not experience a negative The final rule also maintains several and type of harm experienced;uses that economic impact itself,could be granted provisions included in the interim final bear no relation or are grossly funds to provide services to individuals rule and subsequent guidance that are disproportionate to the type or extent of experiencing homelessness,who did intended to ease administration of harm experienced would not be eligible experience negative economic impacts. identifying that the beneficiary uses.21 Reasonably proportional refers Other commenters proposed providing experienced a negative economic impact to the scale of the response compared to assistance to support the expansion of or harm. For example,the interim final the scale of the harm. It also refers to the small businesses,under the theory that rule allowed,and the final rule targeting of the response to beneficiaries this would create more job maintains the ability for,recipients to compared to the amount of harm they opportunities for unemployed workers demonstrate a negative economic experienced;for example,it may not be who experienced negative economic impact on a population or group, reasonably proportional for a cash impacts. referred to as a"class," and to provide assistance program to provide assistance Treasury Response:In the final rule, assistance to households,small in a very small amount to a group that Treasury is clarifying that recipients businesses, or nonprofits that fall within should assess a potential use of funds that class. In such cases,the recipient 20 For example,expenses such as excessive based on which beneficiary experienced need only demonstrate that the compensation to employees or expenses which the negative economic impact,in other household, small business, or nonprofit have already been reimbursed through another words,the households, small federal program,are not reasonably designed to is within the class that experienced a businesses,nonprofits,or impacted address a negative economic impact to a negative economic impact,see section industries that experienced the negative g p beneficiary. P g Standards:Designating Other Impacted 21 For example,a program or service that imposes economic impact. Classes. This would allow,for example, conditions on participation in or acceptance of the Treasury notes that recipients may an internet access assistance program service that would undermine efforts to stop the award SLFRF funds to many different spread of COVID-19 or discourage compliance with for all households with children to types of organizations to carry out support those households'ability to practices in line with CDC guidance for stopping the spread of COVID-19 is not a permissible use of eligible uses of funds and serve participate in healthcare,work, and funds. beneficiaries on behalf of a recipient.