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

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the "most recent full fiscal year of the [state, territory, or Tribal government] prior to the emergency" as the comparator for measuring revenue loss. For these reasons, Treasury is finalizing the definition of "baseline" without change. The interim final rule includes several other definitions that are applicable to the implementation of the offset provision, such as the term "reporting year."360 Commenters did not express concern regarding other definitions in the interim final rule. 2. Framework The interim final rule provides a step-by-step framework, to be used in each reporting year, to determine whether a state or territory used SLFRF funds to offset a reduction in net tax revenue. Consistent with section 602(c)(2) and the interim final rule, the final rule applies to states and territories: (1) Covered changes that reduce tax revenue. Under the interim final rule, a recipient government identifies and values covered changes that the recipient government predicts will have the effect of reducing tax revenue in a given reporting year, similar to the way it would in the ordinary course of its budgeting process. The interim final rule states that the value of these covered changes may be reported based on estimated values produced by a budget model, incorporating reasonable assumptions, that aligns with the recipient government's existing approach for measuring the effects of fiscal policies, and that measures these effects relative to a current law baseline. If the recipient would prefer, the covered changes may also be reported based on actual values using a statistical methodology to isolate the change in year -over -year revenue attributable to the covered change(s), relative to the current law baseline prior to the 36° One commenter requested clarification that references to fiscal year refer to the fiscal year of the recipient. "Reporting year" is defined in the interim final rule and final rule to mean "a single year or partial year within the covered period, aligned to the current fiscal year of the State or Territory during the covered period." 328