Agenda - Council Work Session - 03/08/2022

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Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations 4345 When a recipient provides funds to assistance to a small business that presumed to be impacted by the another entity to carry out eligible uses experienced a pandemic-related loss of pandemic. of funds and serve beneficiaries the revenue. This small business is a Treasury Response:The final rule entity becomes a subrecipient(see beneficiary and may use those funds in maintains the presumptions identified section Distinguishing a Subrecipient many ways,potentially including hiring in the interim final rule and defines versus a Beneficiary). For example,a or retaining staff. However,general low-and moderate-income for the recipient may grant funds to a nonprofit assistance to a business that did not purposes of determining which organization to provide food assistance experience a negative economic impact households and populations recipients (an eligible use)to low-income under the theory that this assistance may presume to have been impacted. To households (the beneficiaries). generally grows the economy and simplify the administration of this Recipients only need to assess whether therefore enhances opportunities for presumption,the final rule adopts a the beneficiaries experienced a negative unemployed workers would not be an definition of low-and moderate-income economic impact and whether the eligible use,because such assistance is based on thresholds established and eligible use responds to that impact, not reasonably designed to impact the used in other federal programs. consistent with the two-part framework individuals or classes that experienced Definitions.The final rule defines a described above;the organization a negative economic impact. In other household as low income if it has (i) carrying out the eligible use does not words,there is not a reasonable income at or below 185 percent of the need to have experienced a negative connection between the assistance Federal Poverty Guidelines (FPG)for the economic impact if it is serving as the provided and an impact on the size of its household based on the most vehicle for reaching the beneficiaries. beneficiaries. Such an activity would be recently published poverty guidelines When making determinations about attenuated from and thus not reasonably by the Department of Health and Human how to implement a program,recipients designed to benefit the households that Services (HHS) or(ii)income at or should consider whether that method of experienced the negative economic below 40 percent of the Area Median program implementation is an effective impact. Income (AMI) for its county and size of and efficient method to implement the household based on the most recently program and do so in accordance with b.Populations Presumed Eligible published data by the Department of the Uniform Guidance provisions that Presumed Eligibility:Impacted and Housing and Urban Development govern procurements and sub-granting Disproportionately Impacted (HUD). 22 of federal funds, as applicable. Households and Communities The final rule defines a household as As noted above,recipients should moderate income if it has (i) income at analyze eligible uses based on the Background:As noted above,the or below 300 percent of the FPG for the beneficiary of the assistance or the interim final rule allowed recipients to size of its household based on the most entity that experienced a negative presume that certain households were recently published poverty guidelines economic impact.Assistance to a small impacted or disproportionately by HHS or(ii)income at or below 65 business or to an impacted industry impacted by the pandemic and thus percent of the AMI for its county and must respond to a negative economic eligible for responsive programs or size of household based on the most impact experienced by that small services. Specifically,under the interim recently published data by HUD.23 business or industry. Recipients may final rule,recipients could presume that Recipients may determine whether to not provide assistance to small a household or population that measure income levels for specific businesses or impacted industries that experienced unemployment, households or for a geographic area did not experience a negative economic experienced increased food or housing based on the type of service to be impact,although recipients can identify insecurity, or is low-or moderate- provided. For example,recipients negative economic impacts for classes, income experienced negative economic developing a program that serves rather than individual businesses,and impacts resulting from the pandemic, specific households (e.g., a subsidy for may also presume that small businesses and recipients may provide services that internet access,a childcare program) may measure income at the household in certain areas experienced impacts; respond to these impacts. see section General Provisions: level. Recipients providing a service final Structure and Standards and section The interim rule also recognized that reaches a general geographic area Assistance to Small Businesses for that pre-existing health, economic,and (e.g., a park)may measure median details. social disparities contributed to income of that area. disproportionate pandemic impacts in Further,recipients should generally Several examples illustrate the application of these concepts. For certain communities and allowed fora use the income threshold for the size of example,a recipient could provide broader list of enumerated eligible uses the household to be served(e.g.,when assistance to households via a contract to respond to the pandemic in providing childcare to a household of with a business to create subsidized jobs disproportionately impacted five,recipients should reference the for the long-term unemployed;in this communities.Under the interim final income threshold for a household of case the business is a subrecipient and rule,recipients were allowed to five);however,recipients may use the need not have experienced a negative presume that families residing in QCTs income threshold for a default economic impact,but the recipient or receiving services provided by Tribal household size of three if providing would need to identify a specific governments were disproportionately connection between the assistance impacted by the pandemic. 22 AMI is also often referred to as median family provided and addressing the negative income for the area.Since AMI is synonymous with p g g Definition of Low-and Moderate- economic impact experienced b thethis term and used more generally,the final rule p P by Income refers to AMI. unemployed households. The recipient 23 For the six New England states of Connecticut, could,for instance, document the Public Comment:As noted earlier, Maine,Massachusetts,New Hampshire,Rhode subsidized jobs created under the many commenters sought a definition Island,and Vermont,HUD provides AMI for towns << >> rather than counties.Recipients in these states contract and their reservation for long- for low-and moderate-income to should use the AMI corresponding to their town term unemployed individuals. provide recipients greater clarity on when determining thresholds for both low and Similarly,a recipient might provide which specific households could be moderate income.