Agenda - Council - 09/13/2022 - Laserfiche WebLink

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Treasury Response: In the final rule, Treasury has maintained the presumption that a reduction in a recipient's revenue is due to the public health emergency with certain adjustments to respond to comments and to better account for revenue loss "due to the COVID-19 public health emergency." The final rule makes adjustments to the presumption to take into account certain government actions to change tax policy. In particular, Treasury is adjusting the presumption to account for changes to tax policy by providing that changes in revenue that are caused by tax increases or decreases adopted after the issuance of the final rule will not be treated as due to the public health emergency. Presumption of Revenue Loss "Due To" the Pandemic In enacting sections 602(c)(1)(C) and 603 (c)(1)(C) of the Social Security Act, Congress provided that a state, local government, or Tribal government could use funds to "cover costs . . for the provision of government services," but only "to the extent of the reduction in revenue... due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year ... prior to the emergency." In doing so, Congress recognized that the pandemic was causing significant disruption to economic activity and sought to minimize the impact of associated revenue losses on the ability of the recipient to provide government services when such services were needed most.294 The text of the statute itself reinforces this important context: The law specifically limits funds to cover revenue losses that both are "due to the COVID-19 public health emergency" and could impact "the provision of government services." 294 See also sections 602(a)(1) and 603(a) of the Social Security Act (appropriating the funds for payment to recipients in order to "mitigate the fiscal effects stemming from the public health emergency"). 251