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NEUs without formal budgets as of January 27, 2020 to self -certify their most recent annual <br />expenditures as of January 27, 2020 for the purpose of calculating the 75 percent budget cap. <br />Further, the interim final rule prohibited states and territories from placing additional conditions <br />or requirements on distributions to NEUs beyond those required by the statute, the interim final <br />rule, or Treasury's guidance and from offsetting any debt owed by such NEUs against such <br />distributions. <br />Commenters predominantly focused on the definition of an NEU's budget for purposes of <br />calculating the 75 percent budget cap, NEU allocations and eligibility, and the prohibition on <br />states and territories imposing additional conditions or requirements in the NEU distribution <br />process. <br />Definition of NEU Budget <br />Public Comment: Commenters suggested that Treasury provide greater clarification on <br />the definition of an NEU's "most recent budget" for purposes of the 75 percent budget cap <br />calculation. Treasury provided updated guidance on its interpretation of the 75 percent budget <br />cap on June 30, 2021, and a commenter suggested that Treasury incorporate such updated <br />interpretation into the Supplementary Information of the final rule. <br />Treasury Response: Consistent with the Update on Interpretation for the 75 Percent <br />Budget Cap Calculation published on June 30, 2021,373 the Supplementary Information of the <br />final rule defines an NEU's budget for purposes of calculating the 75 percent budget cap as its <br />total annual budget, including both operating and capital expenditure budgets, in effect as of <br />January 27, 2020. The guidance also gives states and territories flexibility to provide further <br />373 Treasury's Update on Interpretation for the 75 Percent Budget Cap Calculation can be found at: <br />https://home.treasury.gov/system/files/ 13 6/NEU-Update-75-Percent-Budget-Cap.pdf. <br />351 <br />