Coronavirus Relief Fund for States, Tribal Governments, and Certain Eligible Local Governments
Summary
A Department of the Treasury notice in the Federal Register, Vol. 86, No. 10, of Friday, January 15, 2021, re-publishing in final form its guidance on the Coronavirus Relief Fund for States, Tribal Governments, and Certain Eligible Local Governments. It states that the guidance is unchanged from the version dated September 2, 2020 and the frequently asked questions dated October 19, 2020, except that the period during which eligible expenses may be incurred has been extended to December 31, 2021, a footnote reflects restrictions in section 5001(b) of Division A, and an FAQ cross-reference was corrected. Treasury also adds instructions on returning unused Coronavirus Relief Fund payments. The page opens with an unrelated Internal Revenue Service information collection notice.
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4182 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
ADDRESSES: Direct all written comments quality, utility, and clarity of the 601(d), the amount equal to the amount
to Kinna Brewington, Internal Revenue information to be collected; (d) ways to of funds used in violation of such
Service, room 6526, 1111 Constitution minimize the burden of the collection of subsection shall be booked as a debt of
Avenue NW, Washington, DC 20224. information on respondents, including such entity owed to the federal
FOR FURTHER INFORMATION CONTACT: through the use of automated collection government.
Requests for additional information or techniques or other forms of information The guidance published below is
copies of the form should be directed to technology; and (e) estimates of capital unchanged from the last version of the
Kerry Dennis, at (202) 317–5751 or or start-up costs and costs of operation, guidance dated September 2, 2020,1 and
Internal Revenue Service, Room 6526, maintenance, and purchase of services the frequently asked questions
1111 Constitution Avenue NW, to provide information.
document dated October 19, 2020,2 each
Washington DC 20224, or through the Approved: January 12, 2021. of which was published on Treasury’s
internet, at Kerry.Dennis@irs.gov. Chakinna B. Clemons, website, except for the following
SUPPLEMENTARY INFORMATION: Title: Supervisory Tax Analyst. changes. The introduction of the
Sales of Business Property. [FR Doc. 2021–00841 Filed 1–14–21; 8:45 am] guidance and frequently asked
OMB Number: 1545–0184. BILLING CODE 4830–01–P questions have been modified to reflect
Form Number: Form 4797. this publication in the Federal Register;
Abstract: Form 4797 is used by the guidance and frequently asked
taxpayers to report sales, exchanges, or DEPARTMENT OF THE TREASURY questions have been revised throughout
involuntary conversions of assets used to reflect that the end date of the period
in a trade or business. It is also used to Coronavirus Relief Fund for States, during which eligible expenses may be
compute ordinary income from Tribal Governments, and Certain incurred has been extended to
recapture and the recapture of prior year Eligible Local Governments December 31, 2021; 3 footnote 2 of the
losses under section 1231 of the Internal guidance has been revised to reflect
AGENCY: Department of the Treasury.
Revenue Code. additional restrictions imposed by
Current Actions: There is no change ACTION: Coronavirus Relief Fund
section 5001(b) of Division A the
in the paperwork burden previously program guidance.
CARES Act; FAQ A.59 has been
approved by OMB. The forms are being updated to correct the cross-reference to
SUMMARY: The Department of the
submitted for renewal purposes only. Treasury OIG’s FAQs; and the
Type of Review: Extension of a Treasury (Treasury) is re-publishing in
final form the guidance it previously application of FAQ B.6 has been
currently approved collection. clarified. Treasury is also adding to the
Affected Public: Business or other for- made available on its website regarding
the Coronavirus Relief Fund for States, guidance instructions regarding the
profit organizations, individuals or return to Treasury of unused
households, and farms. tribal governments, and certain eligible
local governments. Coronavirus Relief Fund payments.
Estimated Number of Respondents:
325,000. FOR FURTHER INFORMATION CONTACT: Administrative Procedure Act
Estimated Time per Response: 50 Stephen T. Milligan, Deputy Assistant
hours, 38 minutes. General Counsel (Banking & Finance), The Administrative Procedure Act
Estimated Total Annual Burden 202–622–4051. (APA) provides that the notice, public
Hours: 16,454,750. SUPPLEMENTARY INFORMATION: Section comment, and delayed effective date
The following paragraph applies to all 601 of the Social Security Act, as added requirements of 5 U.S.C. 553 do not
the collections of information covered by section 5001(a) of Division A of the apply ‘‘to the extent that there is
by this notice. Coronavirus Aid, Relief, and Economic involved . . . a matter relating to agency
An agency may not conduct or Security Act (‘‘CARES Act’’) established management or personnel or to public
sponsor, and a person is not required to the Coronavirus Relief Fund (the property, loans, grants, benefits, or
respond to, a collection of information ‘‘Fund’’) and appropriated $150 billion contracts.’’ 5 U.S.C. 553(a). The rule
unless the collection of information for payments by Treasury to States, involves a matter relating to public
displays a valid OMB control number. tribal governments, and certain local property, loans, grants, benefits, or
Books or records relating to a collection governments. contracts and is therefore exempt under
of information must be retained if their The Secretary of the Treasury has the terms of the APA.
contents may become material in the adopted this guidance for recipients of
administration of any internal revenue payments from the Fund pursuant to his 1 As noted previously on Treasury’s website, on
law. Generally, tax returns and tax authority under the Social Security Act June 30, 2020, the guidance provided under ‘‘Costs
incurred during the period that begins on March 1,
return information are confidential, as to adopt rules and regulations as may be 2020, and ends on December 30, 2020’’ was
required by 26 U.S.C. 6103. necessary to the efficient administration updated. On September 2, 2020, the ‘‘Supplemental
Request for Comments: Comments of the functions with which he is Guidance on Use of Funds to Cover Payroll and
submitted in response to this notice will charged under the Social Security Act. Benefits of Public Employees’’ and ‘‘Supplemental
Guidance on Use of Funds to Cover Administrative
be summarized and/or included in the 42 U.S.C. 1302(a). This guidance Costs’’ sections were added.
request for OMB approval. All primarily concerns the use of payments 2 As noted previously on Treasury’s website, on
comments will become a matter of from the Fund set forth in section 601(d) August 10, 2020, the frequently asked questions
public record. Comments are invited on: of the Social Security Act. Treasury’s were revised to add Questions A.49–52. On
(a) Whether the collection of Office of Inspector General (OIG) will September 2, 2020, Questions A.53–56 were added
and Questions A.34 and A.38 were revised. On
information is necessary for the proper use this guidance in its audits of October 19, 2020, Questions A.57–59 and B.13 were
performance of the functions of the recipients’ use of funds. Section added and Questions A.42, 49, and 53 were revised.
agency, including whether the 601(f)(2) of the Social Security Act 3 Section 1001 of Division N of the Consolidated
information shall have practical utility; provides that if the Treasury OIG Appropriations Act, 2021 amended section
601(d)(3) of the Social Security Act by extending
(b) the accuracy of the agency’s estimate determines that a recipient of payments the end of the covered period for Coronavirus Relief
of the burden of the collection of from the Fund has failed to comply with Fund expenditures from December 30, 2020 to
information; (c) ways to enhance the the use of funds provisions of section December 31, 2021.
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Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4183
Regulatory Flexibility Analysis These may include expenditures 601(d) may be summarized as providing
The Regulatory Flexibility Act does incurred to allow the State, territorial, that a State, local, or tribal government
not apply to a rulemaking when a local, or Tribal government to respond may use payments from the Fund only
general notice of proposed rulemaking directly to the emergency, such as by to cover previously unbudgeted costs of
is not required. addressing medical or public health necessary expenditures incurred due to
needs, as well as expenditures incurred the COVID–19 public health emergency
Paperwork Reduction Act to respond to second-order effects of the during the covered period.
The final rule contains no emergency, such as by providing Initial guidance released on April 22,
requirements subject to the Paperwork economic support to those suffering 2020, provided that the cost of an
Reduction Act. from employment or business expenditure is incurred when the
interruptions due to COVID–19-related recipient has expended funds to cover
Authority and Issuance business closures. Funds may not be the cost. Upon further consideration and
42 U.S.C. 1302(a). used to fill shortfalls in government informed by an understanding of State,
revenue to cover expenditures that local, and tribal government practices,
Coronavirus Relief Fund Guidance for would not otherwise qualify under the Treasury is clarifying that for a cost to
State, Territorial, Local, and Tribal statute. Although a broad range of uses be considered to have been incurred,
Governments is allowed, revenue replacement is not performance or delivery must occur
The purpose of this document is to a permissible use of Fund payments. during the covered period but payment
provide guidance to recipients of the The statute also specifies that of funds need not be made during that
funding available under section 601(a) expenditures using Fund payments time (though it is generally expected
of the Social Security Act, as added by must be ‘‘necessary.’’ The Department of that this will take place within 90 days
section 5001 of the Coronavirus Aid, the Treasury understands this term of a cost being incurred). For instance,
Relief, and Economic Security Act broadly to mean that the expenditure is in the case of a lease of equipment or
(‘‘CARES Act’’). The CARES Act reasonably necessary for its intended other property, irrespective of when
established the Coronavirus Relief Fund use in the reasonable judgment of the payment occurs, the cost of a lease
(the ‘‘Fund’’) and appropriated $150 government officials responsible for payment shall be considered to have
billion to the Fund. Under the CARES spending Fund payments. been incurred for the period of the lease
Act, the Fund is to be used to make that is within the covered period but not
Costs Not Accounted for in the Budget
payments for specified uses to States otherwise. Furthermore, in all cases it
Most Recently Approved as of March 27,
and certain local governments; the must be necessary that performance or
2020
District of Columbia and U.S. Territories delivery take place during the covered
The CARES Act also requires that period. Thus the cost of a good or
(consisting of the Commonwealth of
payments be used only to cover costs service received during the covered
Puerto Rico, the United States Virgin
that were not accounted for in the period will not be considered eligible
Islands, Guam, American Samoa, and
budget most recently approved as of under section 601(d) if there is no need
the Commonwealth of the Northern
March 27, 2020. A cost meets this for receipt until after the covered period
Mariana Islands); and Tribal
requirement if either (a) the cost cannot has expired.
governments.
lawfully be funded using a line item, Goods delivered in the covered period
The CARES Act provides that
allotment, or allocation within that need not be used during the covered
payments from the Fund may only be
budget or (b) the cost is for a period in all cases. For example, the
used to cover costs that—
substantially different use from any cost of a good that must be delivered in
1. are necessary expenditures
expected use of funds in such a line December in order to be available for
incurred due to the public health use in January could be covered using
item, allotment, or allocation.
emergency with respect to the The ‘‘most recently approved’’ budget payments from the Fund. Additionally,
Coronavirus Disease 2019 (COVID–19); refers to the enacted budget for the the cost of goods purchased in bulk and
2. were not accounted for in the relevant fiscal period for the particular delivered during the covered period
budget most recently approved as of government, without taking into may be covered using payments from
March 27, 2020 (the date of enactment account subsequent supplemental the Fund if a portion of the goods is
of the CARES Act) for the State or appropriations enacted or other ordered for use in the covered period,
government; and budgetary adjustments made by that the bulk purchase is consistent with the
3. were incurred during the period government in response to the COVID– recipient’s usual procurement policies
that begins on March 1, 2020, and ends 19 public health emergency. A cost is and practices, and it is impractical to
on December 31, 2021.1 not considered to have been accounted track and record when the items were
The guidance that follows sets forth for in a budget merely because it could used. A recipient may use payments
the Department of the Treasury’s be met using a budgetary stabilization from the Fund to purchase a durable
interpretation of these limitations on the fund, rainy day fund, or similar reserve good that is to be used during the
permissible use of Fund payments. account. current period and in subsequent
Necessary Expenditures Incurred Due to periods if the acquisition in the covered
Costs Incurred During the Period That period was necessary due to the public
the Public Health Emergency Begins on March 1, 2020, and Ends on health emergency.
The requirement that expenditures be December 31, 2021 Given that it is not always possible to
incurred ‘‘due to’’ the public health Finally, the CARES Act provides that estimate with precision when a good or
emergency means that expenditures payments from the Fund may only be service will be needed, the touchstone
must be used for actions taken to used to cover costs that were incurred in assessing the determination of need
respond to the public health emergency. during the period that begins on March for a good or service during the covered
1 See Section 601(d) of the Social Security Act, as
1, 2020, and ends on December 31, 2021 period will be reasonableness at the
added by section 5001 of the CARES Act and as
(the ‘‘covered period’’). Putting this time delivery or performance was
amended by section 1001 of Division N of the requirement together with the other sought, e.g., the time of entry into a
Consolidated Appropriations Act, 2021. provisions discussed above, section procurement contract specifying a time
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4184 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
for delivery. Similarly, in recognition of with the COVID–19 public health 6. Any other COVID–19-related
the likelihood of supply chain emergency. expenses reasonably necessary to the
disruptions and increased demand for • Expenses for disinfection of public function of government that satisfy the
certain goods and services during the areas and other facilities, e.g., nursing Fund’s eligibility criteria.
COVID–19 public health emergency, if a homes, in response to the COVID–19
public health emergency. Nonexclusive Examples of Ineligible
recipient enters into a contract requiring
• Expenses for technical assistance to Expenditures 2
the delivery of goods or performance of
services by December 31, 2021, the local authorities or other entities on The following is a list of examples of
failure of a vendor to complete delivery mitigation of COVID–19-related threats costs that would not be eligible
or services by December 31, 2021, will to public health and safety. expenditures of payments from the
not affect the ability of the recipient to • Expenses for public safety measures Fund.
use payments from the Fund to cover undertaken in response to COVID–19. 1. Expenses for the State share of
the cost of such goods or services if the • Expenses for quarantining Medicaid.3
delay is due to circumstances beyond individuals. 2. Damages covered by insurance.
3. Payroll expenses for public safety, 3. Payroll or benefits expenses for
the recipient’s control.
public health, health care, human employees whose work duties are not
This guidance applies in a like
services, and similar employees whose substantially dedicated to mitigating or
manner to costs of subrecipients. Thus, services are substantially dedicated to
a grant or loan, for example, provided responding to the COVID–19 public
mitigating or responding to the COVID– health emergency.
by a recipient using payments from the 19 public health emergency.
Fund must be used by the subrecipient 4. Expenses of actions to facilitate
only to purchase (or reimburse a compliance with COVID–19-related
2 In addition, pursuant to section 5001(b) of
purchase of) goods or services for which Division A of the CARES Act, payments from the
public health measures, such as: Fund are subject to the requirements contained in
receipt both is needed within the • Expenses for food delivery to the Further Appropriations Act of 2020 (Pub. L.
covered period and occurs within the residents, including, for example, senior 116–94) for funds for programs authorized under
covered period. The direct recipient of citizens and other vulnerable section 330 through 340 of the Public Health
payments from the Fund is ultimately Service Act (42 U.S.C. 254 through 256). Section
populations, to enable compliance with 5001(b) thereby applies to payments from the Fund
responsible for compliance with this COVID–19 public health precautions. the general restrictions on the Department of Health
limitation on use of payments from the • Expenses to facilitate distance and Human Services’ appropriations. Of particular
Fund. learning, including technological relevance for the Fund, payments may not be
expended for an abortion, for health benefits
Nonexclusive Examples of Eligible improvements, in connection with coverage—meaning a package of services covered
Expenditures school closings to enable compliance by a managed health care provider or organization
with COVID–19 precautions. pursuant to a contract or other arrangement—that
Eligible expenditures include, but are • Expenses to improve telework includes coverage of abortion, for the creation of a
not limited to, payment for: capabilities for public employees to human embryo or embryos for research purposes,
or for research in which a human embryo is
1. Medical expenses such as: enable compliance with COVID–19 destroyed, discarded, or knowingly subjected to risk
• COVID–19-related expenses of public health precautions. of injury or death greater than that allowed for
public hospitals, clinics, and similar • Expenses of providing paid sick and research on fetuses in utero under 45 CFR 46.204(b)
facilities. paid family and medical leave to public and 42 U.S.C. 289g(b)). The prohibition on payment
for abortions and health benefits coverage that
• Expenses of establishing temporary employees to enable compliance with includes coverage of abortion does not apply to an
public medical facilities and other COVID–19 public health precautions. abortion if the pregnancy is the result of an act of
measures to increase COVID–19 • COVID–19-related expenses of rape or incest; or in the case where a woman suffers
treatment capacity, including related maintaining state prisons and county from a physical disorder, physical injury, or
jails, including as relates to sanitation physical illness, including a life-endangering
construction costs. physical condition caused by or arising from the
• Costs of providing COVID–19 and improvement of social distancing pregnancy itself, that would, as certified by a
testing, including serological testing. measures, to enable compliance with physician, place the woman in danger of death
• Emergency medical response COVID–19 public health precautions. unless an abortion is performed. These provisions
expenses, including emergency medical • Expenses for care for homeless do not prohibit the expenditure by a State, locality,
entity, or private person of State, local, or private
transportation, related to COVID–19. populations provided to mitigate funds (other than a State’s or locality’s contribution
COVID–19 effects and enable
• Expenses for establishing and of Medicaid matching funds). These provisions do
compliance with COVID–19 public not restrict the ability of a managed care provider
operating public telemedicine from offering abortion coverage or the ability of a
health precautions.
capabilities for COVID–19-related 5. Expenses associated with the State or locality to contract separately with such a
treatment. provision of economic support in
provider for such coverage with State funds (other
2. Public health expenses such as: than a State’s or locality’s contribution of Medicaid
connection with the COVID–19 public matching funds). Furthermore, no government
• Expenses for communication and health emergency, such as: which receives payments from the Fund may
enforcement by State, territorial, local, • Expenditures related to the discriminate against a health care entity on the
and Tribal governments of public health provision of grants to small businesses basis that the entity does not provide, pay for,
orders related to COVID–19. provide coverage of, or refer for abortions. Except
to reimburse the costs of business with respect to certain law enforcement and
• Expenses for acquisition and interruption caused by required adjudication activities, no funds may be used to
distribution of medical and protective closures. maintain or establish a computer network unless
supplies, including sanitizing products • Expenditures related to a State, such network blocks the viewing, downloading, and
and personal protective equipment, for exchanging of pornography. No payments from the
territorial, local, or Tribal government Fund may be provided to the Association of
medical personnel, police officers, payroll support program. Community Organizations for Reform Now
social workers, child protection • Unemployment insurance costs (ACORN) or any of its affiliates, subsidiaries, allied
services, and child welfare officers, related to the COVID–19 public health organizations, or successors. For the full text of
direct service providers for older adults emergency if such costs will not be these requirements, see Title V of Pubic Law 116–
94 (133 Stat. 2605 et seq.), available at https://
and individuals with disabilities in reimbursed by the federal government www.congress.gov/116/plaws/publ94/PLAW-
community settings, and other public pursuant to the CARES Act or 116publ94.pdf.
health or safety workers in connection otherwise. 3 See 42 CFR 433.51 and 45 CFR 75.306.
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4. Expenses that have been or will be include, for example, the costs of that public safety employees would
reimbursed under any federal program, redeploying educational support staff or include police officers (including state
such as the reimbursement by the faculty to develop online learning police officers), sheriffs and deputy
federal government pursuant to the capabilities, such as through providing sheriffs, firefighters, emergency medical
CARES Act of contributions by States to information technology support that is responders, correctional and detention
State unemployment funds. not part of the staff or faculty’s ordinary officers, and those who directly support
5. Reimbursement to donors for responsibilities. such employees such as dispatchers and
donated items or services. supervisory personnel. Public health
6. Workforce bonuses other than Substantially Dedicated
employees would include employees
hazard pay or overtime. Within this category of substantially involved in providing medical and other
7. Severance pay. different uses, as stated in the Guidance health services to patients and
8. Legal settlements. above, Treasury has included payroll supervisory personnel, including
and benefits expenses for public safety, medical staff assigned to schools,
Supplemental Guidance on Use of
public health, health care, human prisons, and other such institutions, and
Funds To Cover Payroll and Benefits of
services, and similar employees whose other support services essential for
Public Employees
services are substantially dedicated to patient care (e.g., laboratory technicians)
As discussed in the Guidance above, mitigating or responding to the COVID– as well as employees of public health
the CARES Act provides that payments 19 public health emergency. The full departments directly engaged in matters
from the Fund must be used only to amount of payroll and benefits expenses related to public health and related
cover costs that were not accounted for of substantially dedicated employees supervisory personnel.
in the budget most recently approved as may be covered using payments from
of March 27, 2020. As reflected in the the Fund. Treasury has not developed a Not Substantially Dedicated
Guidance and FAQs, Treasury has not precise definition of what ‘‘substantially As provided in FAQ A.47, a State,
interpreted this provision to limit dedicated’’ means given that there is not local, or tribal government may also
eligible costs to those that are a precise way to define this term across track time spent by employees related to
incremental increases above amounts different employment types. The COVID–19 and apply Fund payments on
previously budgeted. Rather, Treasury relevant unit of government should that basis but would need to do so
has interpreted this provision to exclude maintain documentation of the consistently within the relevant agency
items that were already covered for their ‘‘substantially dedicated’’ conclusion or department. This means, for example,
original use (or a substantially similar with respect to its employees. that a government could cover payroll
use). This guidance reflects the intent If an employee is not substantially expenses allocated on an hourly basis to
behind the Fund, which was not to dedicated to mitigating or responding to employees’ time dedicated to mitigating
provide general fiscal assistance to state the COVID–19 public health emergency, or responding to the COVID–19 public
governments but rather to assist them his or her payroll and benefits expenses health emergency. This result provides
with COVID–19-related necessary may not be covered in full with equitable treatment to governments that,
expenditures. With respect to personnel payments from the Fund. A portion of for example, instead of having a few
expenses, though the Fund was not such expenses may be able to be employees who are substantially
intended to be used to cover covered, however, as discussed below. dedicated to the public health
government payroll expenses generally, emergency, have many employees who
Public Health and Public Safety
the Fund was intended to provide have a minority of their time dedicated
assistance to address increased In recognition of the particular to the public health emergency.
expenses, such as the expense of hiring importance of public health and public
safety workers to State, local, and tribal Covered Benefits
new personnel as needed to assist with
the government’s response to the public government responses to the public Payroll and benefits of a substantially
health emergency and to allow health emergency, Treasury has dedicated employee may be covered
recipients facing budget pressures not to provided, as an administrative using payments from the Fund to the
have to lay off or furlough employees accommodation, that a State, local, or extent incurred between March 1 and
who would be needed to assist with that tribal government may presume that December 31, 2021.
purpose. public health and public safety Payroll includes certain hazard pay
employees meet the substantially and overtime, but not workforce
Substantially Different Use dedicated test, unless the chief bonuses. As discussed in FAQ A.29,
As stated in the Guidance above, executive (or equivalent) of the relevant hazard pay may be covered using
Treasury considers the requirement that government determines that specific payments from the Fund if it is
payments from the Fund be used only circumstances indicate otherwise. This provided for performing hazardous duty
to cover costs that were not accounted means that, if this presumption applies, or work involving physical hardship
for in the budget most recently work performed by such employees is that in each case is related to COVID–
approved as of March 27, 2020, to be considered to be a substantially 19. This means that, whereas payroll
met if either (a) the cost cannot lawfully different use than accounted for in the and benefits of an employee who is
be funded using a line item, allotment, most recently approved budget as of substantially dedicated to mitigating or
or allocation within that budget or (b) March 27, 2020. All costs of such responding to the COVID–19 public
the cost is for a substantially different employees may be covered using health emergency may generally be
use from any expected use of funds in payments from the Fund for services covered in full using payments from the
such a line item, allotment, or provided during the period that begins Fund, hazard pay specifically may only
allocation. on March 1, 2020, and ends on be covered to the extent it is related to
Treasury has provided examples as to December 31, 2021. COVID–19. For example, a recipient
what would constitute a substantially In response to questions regarding may use payments from the Fund to
different use. Treasury provided (in which employees are within the scope cover hazard pay for a police officer
FAQ A.3) that costs incurred for a of this accommodation, Treasury is coming in close contact with members
substantially different use would supplementing this guidance to clarify of the public to enforce public health or
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4186 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
public safety orders, but across-the- are applicable to indirect costs do not Security Act and Treasury’s guidance, a
board hazard pay for all members of a apply. Recipients may not apply their necessary administrative compliance
police department regardless of their indirect costs rates to payments received expense that relates to such underlying
duties would not be able to be covered from the Fund. cost may be incurred after December 31,
with payments from the Fund. This Recipients may, if they meet the 2021. Such an expense would include,
position reflects the statutory intent conditions specified in the guidance for for example, expenses incurred to
discussed above: the Fund was intended tracking time consistently across a comply with the Single Audit Act and
to be used to help governments address department, use payments from the reporting and recordkeeping
the public health emergency both by Fund to cover the portion of payroll and requirements imposed by the Office of
providing funds for incremental benefits of employees corresponding to Inspector General. A recipient with such
expenses (such as hazard pay related to time spent on administrative work necessary administrative expenses, such
COVID–19) and to allow governments necessary due to the COVID–19 public as an ongoing audit continuing past
not to have to furlough or lay off health emergency. (In other words, such December 31, 2021, that relates to Fund
employees needed to address the public costs would be eligible direct costs of expenditures incurred during the
health emergency but was not intended the recipient). This includes, but is not covered period, must report to the
to provide across-the-board budget limited to, costs related to disbursing Treasury Office of Inspector General by
support (as would be the case if hazard payments from the Fund and managing the quarter ending September 2022 an
pay regardless of its relation to COVID– new grant programs established using estimate of the amount of such
19 or workforce bonuses were permitted payments from the Fund. necessary administrative expenses.
to be covered using payments from the As with any other costs to be covered
using payments from the Fund, any Instructions for State, Territorial,
Fund).
such administrative costs must be Local, and Tribal Governments To
Relatedly, both hazard pay and
incurred by December 31, 2021, with an Return Unused Coronavirus Relief
overtime pay for employees that are not
exception for certain compliance costs Fund Payments to the Department of
substantially dedicated may only be
as discussed below. Furthermore, as the Treasury
covered using the Fund if the hazard
pay and overtime pay is for COVID–19- discussed in the Guidance above, as Any remaining amount of payments
related duties. As discussed above, with any other cost, an administrative from the Fund not used for eligible
governments may allocate payroll and cost that has been or will be reimbursed expenses incurred during the covered
benefits of such employees with respect under any federal program may not be period must be returned to Treasury in
to time worked on COVID–19-related covered with the Fund. For example, if one of three ways, set forth below.
matters. an administrative cost is already being
Please note that these instructions are
Covered benefits include, but are not covered as a direct or indirect cost
for Fund recipients to return the balance
limited to, the costs of all types of leave pursuant to another federal grant, the
of unused Fund payments to Treasury.
(vacation, family-related, sick, military, Fund may not be used to cover that cost.
If the Treasury Office of Inspector
bereavement, sabbatical, jury duty), Compliance Costs Related to the Fund General determines that a Fund
employee insurance (health, life, dental, recipient has failed to comply with the
As previously stated in FAQ B.11,
vision), retirement (pensions, 401(k)), use restrictions set forth in section
recipients are permitted to use
unemployment benefit plans (federal 601(d) of the Social Security Act, the
payments from the Fund to cover the
and state), workers compensation Fund recipient should follow the
expenses of an audit conducted under
insurance, and Federal Insurance instructions provided by the Treasury
the Single Audit Act, subject to the
Contributions Act (FICA) taxes (which Office of Inspector General for
limitations set forth in 2 CFR 200.425.
includes Social Security and Medicare satisfaction of the related debt rather
Pursuant to that provision of the
taxes). than following these instructions.
Uniform Guidance, recipients and
Supplemental Guidance on Use of subrecipients subject to the Single Audit 1. Fedwire receipts—Treasury can
Funds To Cover Administrative Costs Act may use payments from the Fund to accept Fedwire payments for the return
cover a reasonably proportionate share of funds to Treasury.
General Please provide the following
of the costs of audits attributable to the
Payments from the Fund are not Fund. instructions to your Financial
administered as part of a traditional To the extent a cost is incurred by Institution for the remittance of Fedwire
grant program and the provisions of the December 31, 2021, for an eligible use payments to the Department of the
Uniform Guidance, 2 CFR part 200, that consistent with section 601 of the Social Treasury.
FEDWIRE INSTRUCTIONS
Fedwire field tag Fedwire field name Required information
{1510} .......................................................................... Type/Subtype ............................................................... 1000
{2000} .......................................................................... Amount ........................................................................ (enter payment amount)
{3400} .......................................................................... Receiver ABA routing number * ................................... 021030004
{3400} .......................................................................... Receiver ABA short name ........................................... TREAS NYC
{3600} .......................................................................... Business Function Code .............................................. CTR
{4200} .......................................................................... Beneficiary Identifier (account number) ....................... 820010001000
{4200} .......................................................................... Beneficiary Name ........................................................ DEPARTMENT OF THE TREASURY
{5000} .......................................................................... Originator ..................................................................... (enter the name of the originator of the payment)
{6000} .......................................................................... Originator to Beneficiary Information—Line 1 ............. (enter information to identify the purpose of the pay-
ment)
{6000} .......................................................................... Originator to Beneficiary Information—Line 2 ............. (enter information to identify the purpose of the pay-
ment)
{6000} .......................................................................... Originator to Beneficiary Information—Line 3 ............. (enter information to identify the purpose of the pay-
ment)
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Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4187
FEDWIRE INSTRUCTIONS—Continued
Fedwire field tag Fedwire field name Required information
{6000} .......................................................................... Originator to Beneficiary Information—Line 4 ............. (enter information to identify the purpose of the pay-
ment)
* The financial institution address for Treasury’s routing number is 33 Liberty Street, New York, NY 10045.
2. ACH receipts —Treasury can accept Please provide the following Automated Clearing House (ACH)
ACH payment for the return of funds to instructions to your Financial credits to the Department of the
Treasury. Institution for the remittance of Treasury.
ACH CREDIT INSTRUCTIONS
NACHA NACHA NACHA
record type Required information
field data element name
code
5 ...................... 3 Company Name ........................................................... (enter the name of the payor)
5 ...................... 6 Standard Entry Class Code ......................................... CCD
5 ...................... 9 Effective Entry Date ..................................................... (enter intended settlement date)
6 ...................... 2 Transaction Code * ...................................................... 22
6 ...................... 3&4 Receiving DFI Identification (ABA routing #) .............. 051036706
6 ...................... 5 DFI Account Number ................................................... 820010001000
6 ...................... 6 Amount ........................................................................ (enter payment amount)
6 ...................... 8 Receiving Company Name .......................................... Department of the Treasury
* ACH debits are not permitted to this ABA routing number. All debits received will be automatically returned.
3. Check receipts (not preferred)— 2. The Guidance says that funding can necessarily limited to, costs of
Checks may be sent to one of the be used to meet payroll expenses for personnel and services that were
following addresses (depending on the public safety, public health, health care, budgeted for in the most recently
method of delivery). human services, and similar employees approved budget but which, due
whose services are substantially entirely to the COVID–19 public health
U.S. MAIL/PARCEL DELIVERY ADDRESS dedicated to mitigating or responding to emergency, have been diverted to
the COVID–19 public health emergency. substantially different functions. This
U.S. Mail address— Parcel delivery ad- How does a government determine would include, for example, the costs of
processing dress—processing whether payroll expenses for a given redeploying corrections facility staff to
employee satisfy the ‘‘substantially enable compliance with COVID–19
Fiscal Accounting Fiscal Accounting dedicated’’ condition? public health precautions through work
Program, Admin & Program, Admin & such as enhanced sanitation or
Training Group. Training Group. The Fund is designed to provide enforcing social distancing measures;
Avery Street A3–G, Avery Street A3–G, ready funding to address unforeseen the costs of redeploying police to
Bureau of the Fis- Fiscal Service financial needs and risks created by the support management and enforcement
cal Service, P.O. Warehouse & Op- COVID–19 public health emergency. For
Box 1328, Parkers- erations Center
of stay-at-home orders; or the costs of
this reason, and as a matter of diverting educational support staff or
burg, WV 26106– Dock 1, 257 Bosley administrative convenience in light of
1328. Industrial Park faculty to develop online learning
Drive, Parkersburg
the emergency nature of this program, a capabilities, such as through providing
WV 26106. State, territorial, local, or Tribal information technology support that is
government may presume that payroll not part of the staff or faculty’s ordinary
costs for public health and public safety responsibilities.
Frequently Asked Questions
employees are payments for services Note that a public function does not
The following answers to frequently substantially dedicated to mitigating or become a ‘‘substantially different use’’
asked questions supplement Treasury’s responding to the COVID–19 public merely because it is provided from a
Coronavirus Relief Fund Guidance for health emergency, unless the chief different location or through a different
State, Territorial, Local, and Tribal executive (or equivalent) of the relevant manner. For example, although
Governments. government determines that specific developing online instruction
circumstances indicate otherwise. capabilities may be a substantially
A. Eligible Expenditures different use of funds, online instruction
3. The Guidance says that a cost was not
1. Are governments required to submit accounted for in the most recently itself is not a substantially different use
proposed expenditures to Treasury for approved budget if the cost is for a of public funds than classroom
approval? substantially different use from any instruction.
expected use of funds in such a line 4. May a State receiving a payment
No. Governments are responsible for item, allotment, or allocation. What transfer funds to a local government?
making determinations as to what would qualify as a ‘‘substantially
expenditures are necessary due to the Yes, provided that the transfer
different use’’ for purposes of the Fund
public health emergency with respect to qualifies as a necessary expenditure
eligibility?
incurred due to the public health
COVID–19 and do not need to submit
Costs incurred for a ‘‘substantially emergency and meets the other criteria
any proposed expenditures to Treasury.
different use’’ include, but are not of section 601(d) of the Social Security
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4188 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
Act. Such funds would be subject to 9. Are States permitted to use Fund meant by an expense that was not
recoupment by the Treasury Department payments to support state accounted for in the budget most
if they have not been used in a manner unemployment insurance funds recently approved as of March 27, 2020.
consistent with section 601(d) of the generally?
12. In some cases, first responders and
Social Security Act. To the extent that the costs incurred critical health care workers that contract
5. May a unit of local government by a state unemployment insurance COVID–19 are eligible for workers’
receiving a Fund payment transfer funds fund are incurred due to the COVID–19 compensation coverage. Is the cost of
to another unit of government? public health emergency, a State may this expanded workers compensation
use Fund payments to make payments coverage eligible?
Yes. For example, a county may to its respective state unemployment
transfer funds to a city, town, or school insurance fund, separate and apart from Increased workers compensation cost
district within the county and a county such State’s obligation to the to the government due to the COVID–19
or city may transfer funds to its State, unemployment insurance fund as an public health emergency incurred
employer. This will permit States to use during the period beginning March 1,
provided that the transfer qualifies as a
Fund payments to prevent expenses 2020, and ending December 31, 2021, is
necessary expenditure incurred due to
related to the public health emergency an eligible expense.
the public health emergency and meets
the other criteria of section 601(d) of the from causing their state unemployment 13. If a recipient would have
Social Security Act outlined in the insurance funds to become insolvent. decommissioned equipment or not
Guidance. For example, a transfer from 10. Are recipients permitted to use Fund renewed a lease on particular office
a county to a constituent city would not payments to pay for unemployment space or equipment but decides to
be permissible if the funds were insurance costs incurred by the continue to use the equipment or to
intended to be used simply to fill recipient as an employer? renew the lease in order to respond to
shortfalls in government revenue to the public health emergency, are the
cover expenditures that would not Yes, Fund payments may be used for costs associated with continuing to
otherwise qualify as an eligible unemployment insurance costs incurred operate the equipment or the ongoing
expenditure. by the recipient as an employer (for lease payments eligible expenses?
example, as a reimbursing employer)
6. Is a Fund payment recipient required related to the COVID–19 public health Yes. To the extent the expenses were
to transfer funds to a smaller, emergency if such costs will not be previously unbudgeted and are
constituent unit of government within reimbursed by the federal government otherwise consistent with section 601(d)
its borders? pursuant to the CARES Act or of the Social Security Act outlined in
otherwise. the Guidance, such expenses would be
No. For example, a county recipient is eligible.
not required to transfer funds to smaller 11. The Guidance states that the Fund
may support a ‘‘broad range of uses’’ 14. May recipients provide stipends to
cities within the county’s borders. employees for eligible expenses (for
including payroll expenses for several
7. Are recipients required to use other classes of employees whose services are example, a stipend to employees to
federal funds or seek reimbursement ‘‘substantially dedicated to mitigating or improve telework capabilities) rather
under other federal programs before responding to the COVID–19 public than require employees to incur the
using Fund payments to satisfy eligible health emergency.’’ What are some eligible cost and submit for
expenses? examples of types of covered reimbursement?
employees? Expenditures paid for with payments
No. Recipients may use Fund
payments for any expenses eligible The Guidance provides examples of from the Fund must be limited to those
under section 601(d) of the Social broad classes of employees whose that are necessary due to the public
payroll expenses would be eligible health emergency. As such, unless the
Security Act outlined in the Guidance.
expenses under the Fund. These classes government were to determine that
Fund payments are not required to be
of employees include public safety, providing assistance in the form of a
used as the source of funding of last
public health, health care, human stipend is an administrative necessity,
resort. However, as noted below,
services, and similar employees whose the government should provide such
recipients may not use payments from
services are substantially dedicated to assistance on a reimbursement basis to
the Fund to cover expenditures for ensure as much as possible that funds
mitigating or responding to the COVID–
which they will receive reimbursement. are used to cover only eligible expenses.
19 public health emergency. Payroll and
8. Are there prohibitions on combining benefit costs associated with public 15. May Fund payments be used for
a transaction supported with Fund employees who could have been COVID–19 public health emergency
payments with other CARES Act furloughed or otherwise laid off but who recovery planning?
funding or COVID–19 relief Federal were instead repurposed to perform
funding? previously unbudgeted functions Yes. Expenses associated with
substantially dedicated to mitigating or conducting a recovery planning project
Recipients will need to consider the responding to the COVID–19 public or operating a recovery coordination
applicable restrictions and limitations of health emergency are also covered. office would be eligible, if the expenses
such other sources of funding. In Other eligible expenditures include otherwise meet the criteria set forth in
addition, expenses that have been or payroll and benefit costs of educational section 601(d) of the Social Security Act
will be reimbursed under any federal support staff or faculty responsible for outlined in the Guidance.
program, such as the reimbursement by developing online learning capabilities
16. Are expenses associated with
the federal government pursuant to the necessary to continue educational
contact tracing eligible?
CARES Act of contributions by States to instruction in response to COVID–19-
State unemployment funds, are not related school closures. Please see the Yes, expenses associated with contact
eligible uses of Fund payments. Guidance for a discussion of what is tracing are eligible.
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Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4189
17. To what extent may a government 22. May recipients use Fund payments 25. The Guidance provides that
use Fund payments to support the to cover employment and training expenses associated with the provision
operations of private hospitals? programs for employees that have been of economic support in connection with
furloughed due to the public health the public health emergency, such as
Governments may use Fund payments emergency? expenditures related to the provision of
to support public or private hospitals to grants to small businesses to reimburse
the extent that the costs are necessary Yes, this would be an eligible expense the costs of business interruption
expenditures incurred due to the if the government determined that the caused by required closures, would
COVID–19 public health emergency, but costs of such employment and training constitute eligible expenditures of Fund
the form such assistance would take programs would be necessary due to the payments. Would such expenditures be
may differ. In particular, financial public health emergency. eligible in the absence of a stay-at-home
assistance to private hospitals could order?
take the form of a grant or a short-term 23. May recipients use Fund payments
to provide emergency financial Fund payments may be used for
loan. economic support in the absence of a
assistance to individuals and families
18. May payments from the Fund be stay-at-home order if such expenditures
directly impacted by a loss of income are determined by the government to be
used to assist individuals with enrolling due to the COVID–19 public health
in a government benefit program for necessary. This may include, for
emergency? example, a grant program to benefit
those who have been laid off due to
COVID–19 and thereby lost health Yes, if a government determines such small businesses that close voluntarily
insurance? assistance to be a necessary to promote social distancing measures
or that are affected by decreased
expenditure. Such assistance could
Yes. To the extent that the relevant customer demand as a result of the
include, for example, a program to assist
government official determines that COVID–19 public health emergency.
individuals with payment of overdue
these expenses are necessary and they 26. May Fund payments be used to
rent or mortgage payments to avoid
meet the other requirements set forth in assist impacted property owners with
section 601(d) of the Social Security Act eviction or foreclosure or unforeseen
financial costs for funerals and other the payment of their property taxes?
outlined in the Guidance, these
expenses are eligible. emergency individual needs. Such Fund payments may not be used for
assistance should be structured in a government revenue replacement,
19. May recipients use Fund payments manner to ensure as much as possible, including the provision of assistance to
to facilitate livestock depopulation within the realm of what is meet tax obligations.
incurred by producers due to supply administratively feasible, that such 27. May Fund payments be used to
chain disruptions? assistance is necessary. replace foregone utility fees? If not, can
Yes, to the extent these efforts are 24. The Guidance provides that eligible Fund payments be used as a direct
deemed necessary for public health expenditures may include expenditures subsidy payment to all utility account
reasons or as a form of economic related to the provision of grants to holders?
support as a result of the COVID–19 small businesses to reimburse the costs Fund payments may not be used for
health emergency. of business interruption caused by government revenue replacement,
required closures. What is meant by a including the replacement of unpaid
20. Would providing a consumer grant utility fees. Fund payments may be used
program to prevent eviction and assist ‘‘small business,’’ and is the Guidance
intended to refer only to expenditures to for subsidy payments to electricity
in preventing homelessness be account holders to the extent that the
considered an eligible expense? cover administrative expenses of such a
grant program? subsidy payments are deemed by the
Yes, assuming that the recipient recipient to be necessary expenditures
considers the grants to be a necessary Governments have discretion to incurred due to the COVID–19 public
expense incurred due to the COVID–19 determine what payments are necessary. health emergency and meet the other
public health emergency and the grants A program that is aimed at assisting criteria of section 601(d) of the Social
meet the other requirements for the use small businesses with the costs of Security Act outlined in the Guidance.
of Fund payments under section 601(d) business interruption caused by For example, if determined to be a
of the Social Security Act outlined in required closures should be tailored to necessary expenditure, a government
the Guidance. As a general matter, could provide grants to individuals
assist those businesses in need of such
providing assistance to recipients to facing economic hardship to allow them
assistance. The amount of a grant to a
enable them to meet property tax to pay their utility fees and thereby
small business to reimburse the costs of continue to receive essential services.
requirements would not be an eligible business interruption caused by
use of funds, but exceptions may be required closures would also be an 28. Could Fund payments be used for
made in the case of assistance designed eligible expenditure under section capital improvement projects that
to prevent foreclosures. 601(d) of the Social Security Act, as broadly provide potential economic
outlined in the Guidance. development in a community?
21. May recipients create a ‘‘payroll
support program’’ for public employees? In general, no. If capital improvement
projects are not necessary expenditures
Use of payments from the Fund to incurred due to the COVID–19 public
cover payroll or benefits expenses of health emergency, then Fund payments
public employees are limited to those may not be used for such projects.
employees whose work duties are However, Fund payments may be
substantially dedicated to mitigating or used for the expenses of, for example,
responding to the COVID–19 public establishing temporary public medical
health emergency. facilities and other measures to increase
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4190 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
COVID–19 treatment capacity or 33. Should States receiving a payment payments to advisors and underwriters,
improve mitigation measures, including transfer funds to local governments that associated with the issuance of the
related construction costs. did not receive payments directly from TANs.
Treasury?
29. The Guidance includes workforce 36. May recipients use Fund payments
bonuses as an example of ineligible Yes, provided that the transferred to expand rural broadband capacity to
expenses but provides that hazard pay funds are used by the local government assist with distance learning and
would be eligible if otherwise for eligible expenditures under the telework?
determined to be a necessary expense. Is statute. To facilitate prompt distribution Such expenditures would only be
there a specific definition of ‘‘hazard of Title V funds, the CARES Act permissible if they are necessary for the
pay’’? authorized Treasury to make direct public health emergency. The cost of
payments to local governments with projects that would not be expected to
Hazard pay means additional pay for populations in excess of 500,000, in increase capacity to a significant extent
performing hazardous duty or work amounts equal to 45% of the local until the need for distance learning and
involving physical hardship, in each government’s per capita share of the telework have passed due to this public
case that is related to COVID–19. statewide allocation. This statutory health emergency would not be
structure was based on a recognition necessary due to the public health
30. The Guidance provides that
that it is more administratively feasible emergency and thus would not be
ineligible expenditures include
to rely on States, rather than the federal eligible uses of Fund payments.
‘‘[p]ayroll or benefits expenses for
government, to manage the transfer of
employees whose work duties are not
funds to smaller local governments. 37. Are costs associated with increased
substantially dedicated to mitigating or
Consistent with the needs of all local solid waste capacity an eligible use of
responding to the COVID–19 public
governments for funding to address the payments from the Fund?
health emergency.’’ Is this intended to
public health emergency, States should Yes, costs to address increase in solid
relate only to public employees?
transfer funds to local governments with waste as a result of the public health
Yes. This particular nonexclusive populations of 500,000 or less, using as emergency, such as relates to the
example of an ineligible expenditure a benchmark the per capita allocation disposal of used personal protective
relates to public employees. A recipient formula that governs payments to larger equipment, would be an eligible
would not be permitted to pay for local governments. This approach will expenditure.
payroll or benefit expenses of private ensure equitable treatment among local
employees and any financial assistance governments of all sizes. 38. May payments from the Fund be
(such as grants or short-term loans) to For example, a State received the used to cover across-the-board hazard
private employers are not subject to the minimum $1.25 billion allocation and pay for employees working during a
restriction that the private employers’ had one county with a population over state of emergency?
employees must be substantially 500,000 that received $250 million No. Hazard pay means additional pay
dedicated to mitigating or responding to directly. The State should distribute 45 for performing hazardous duty or work
the COVID–19 public health emergency. percent of the $1 billion it received, or involving physical hardship, in each
$450 million, to local governments case that is related to COVID–19.
31. May counties pre-pay with CARES within the State with a population of Payments from the fund may only be
Act funds for expenses such as a one or 500,000 or less. used to cover such hazard pay.
two-year facility lease, such as to house
staff hired in response to COVID–19? 34. May a State impose restrictions on 39. May Fund payments be used for
transfers of funds to local governments? expenditures related to the
A government should not make Yes, to the extent that the restrictions administration of Fund payments by a
prepayments on contracts using facilitate the State’s compliance with State, territorial, local, or Tribal
payments from the Fund to the extent the requirements set forth in section government?
that doing so would not be consistent 601(d) of the Social Security Act Yes, if the administrative expenses
with its ordinary course policies and outlined in the Guidance and other represent an increase over previously
procedures. applicable requirements such as the budgeted amounts and are limited to
32. Must a stay-at-home order or other Single Audit Act, discussed below. what is necessary. For example, a State
public health mandate be in effect in Other restrictions, such as restrictions may expend Fund payments on
order for a government to provide on reopening that do not directly necessary administrative expenses
assistance to small businesses using concern the use of funds, are not incurred with respect to a new grant
payments from the Fund? permissible. program established to disburse
35. If a recipient must issue tax amounts received from the Fund.
No. The Guidance provides, as an
example of an eligible use of payments anticipation notes (TANs) to make up 40. May recipients use Fund payments
from the Fund, expenditures related to for tax due date deferrals or revenue to provide loans?
the provision of grants to small shortfalls, are the expenses associated Yes, if the loans otherwise qualify as
businesses to reimburse the costs of with the issuance eligible uses of Fund eligible expenditures under section
business interruption caused by payments? 601(d) of the Social Security Act as
required closures. Such assistance may If a government determines that the implemented by the Guidance. Any
be provided using amounts received issuance of TANs is necessary due to amounts repaid by the borrower before
from the Fund in the absence of a the COVID–19 public health emergency, December 31, 2021, must be either
requirement to close businesses if the the government may expend payments returned to Treasury upon receipt by the
relevant government determines that from the Fund on the interest expense unit of government providing the loan
such expenditures are necessary in payable on TANs by the borrower and or used for another expense that
response to the public health unbudgeted administrative and qualifies as an eligible expenditure
emergency. transactional costs, such as necessary under section 601(d) of the Social
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Security Act. Any amounts not repaid financial assistance provided would 48. May Fund payments be used to
by the borrower until after December 31, have to be related to COVID–19. cover increased administrative leave
2021, must be returned to Treasury costs of public employees who could
upon receipt by the unit of government 45. May recipients use Fund payments not telework in the event of a stay at
lending the funds. to remarket the recipient’s convention home order or a case of COVID–19 in
facilities and tourism industry? the workplace?
41. May Fund payments be used for
expenditures necessary to prepare for a Yes, if the costs of such remarketing The statute requires that payments be
future COVID–19 outbreak? satisfy the requirements of the CARES used only to cover costs that were not
Fund payments may be used only for Act. Expenses incurred to publicize the accounted for in the budget most
expenditures necessary to address the resumption of activities and steps taken recently approved as of March 27, 2020.
current COVID–19 public health to ensure a safe experience may be As stated in the Guidance, a cost meets
emergency. For example, a State may needed due to the public health this requirement if either (a) the cost
spend Fund payments to create a emergency. Expenses related to cannot lawfully be funded using a line
reserve of personal protective developing a long-term plan to item, allotment, or allocation within
equipment or develop increased reposition a recipient’s convention and that budget or (b) the cost is for a
intensive care unit capacity to support tourism industry and infrastructure substantially different use from any
regions in its jurisdiction not yet would not be incurred due to the public expected use of funds in such a line
affected, but likely to be impacted by item, allotment, or allocation. If the cost
health emergency and therefore may not
the current COVID–19 pandemic. of an employee was allocated to
be covered using payments from the
administrative leave to a greater extent
42. May funds be used to satisfy non- Fund. than was expected, the cost of such
federal matching requirements under 46. May a State provide assistance to administrative leave may be covered
the Stafford Act? farmers and meat processors to expand using payments from the Fund.
Yes, payments from the Fund may be capacity, such to cover overtime for 49. Are States permitted to use
used to meet the non-federal matching USDA meat inspectors? Coronavirus Relief Fund payments to
requirements for Stafford Act assistance, satisfy non-federal matching
including FEMA’s Emergency If a State determines that expanding
requirements under the Stafford Act,
Management Performance Grant (EMPG) meat processing capacity, including by
including ‘‘lost wages assistance’’
and EMPG Supplemental programs, to paying overtime to USDA meat authorized by the Presidential
the extent such matching requirements inspectors, is a necessary expense Memorandum on Authorizing the Other
entail COVID–19-related costs that incurred due to the public health Needs Assistance Program for Major
otherwise satisfy the Fund’s eligibility emergency, such as if increased capacity Disaster Declarations Related to
criteria and the Stafford Act. Regardless is necessary to allow farmers and Coronavirus Disease 2019 (August 8,
of the use of Fund payments for such processors to donate meat to food banks, 2020)?
purposes, FEMA funding is still then such expenses are eligible
dependent on FEMA’s determination of Yes. As previous guidance has stated,
expenses, provided that the expenses
eligibility under the Stafford Act. payments from the Fund may be used to
satisfy the other requirements set forth
meet the non-federal matching
43. Must a State, local, or tribal in section 601(d) of the Social Security requirements for Stafford Act assistance
government require applications to be Act outlined in the Guidance. to the extent such matching
submitted by businesses or individuals 47. The guidance provides that funding requirements entail COVID–19-related
before providing assistance using may be used to meet payroll expenses costs that otherwise satisfy the Fund’s
payments from the Fund? for public safety, public health, health eligibility criteria and the Stafford Act.
Governments have discretion to care, human services, and similar States are fully permitted to use
determine how to tailor assistance employees whose services are payments from the Fund to satisfy 100%
programs they establish in response to substantially dedicated to mitigating or of their cost share for lost wages
the COVID–19 public health emergency. responding to the COVID–19 public assistance recently made available
However, such a program should be under the Stafford Act. If a State makes
health emergency. May Fund payments
structured in such a manner as will a payment to an individual under the
be used to cover such an employee’s
ensure that such assistance is ‘‘lost wages assistance’’ program and
entire payroll cost or just the portion of
determined to be necessary in response later determines that such individual
time spent on mitigating or responding was ineligible for the program, the
to the COVID–19 public health
to the COVID–19 public health ineligibility determination has the
emergency and otherwise satisfies the
emergency? following consequences:
requirements of the CARES Act and
other applicable law. For example, a per As a matter of administrative • The State incurs an obligation to
capita payment to residents of a convenience, the entire payroll cost of FEMA in the amount of the payment to
particular jurisdiction without an the ineligible individual. A State’s
an employee whose time is substantially
assessment of individual need would obligation to FEMA for making an
dedicated to mitigating or responding to
not be an appropriate use of payments improper payment to an individual
the COVID–19 public health emergency under the ‘‘lost wages assistance’’
from the Fund. is eligible, provided that such payroll program is not incurred due to the
44. May Fund payments be provided to costs are incurred by December 31, public health emergency and, therefore,
non-profits for distribution to 2021. An employer may also track time payments made pursuant to this
individuals in need of financial spent by employees related to COVID– obligation would not be an eligible use
assistance, such as rent relief? 19 and apply Fund payments on that of the Fund.
Yes, non-profits may be used to basis but would need to do so • The ‘‘lost wages assistance’’
distribute assistance. Regardless of how consistently within the relevant agency payment to the ineligible individual
the assistance is structured, the or department. would be deemed to be an ineligible
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4192 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
expense for purposes of the Fund, and 53. May Fund recipients incur expenses amount of $500 per elementary and
any amount charged to the Fund (e.g., associated with the safe reopening of secondary school student. In addition,
to satisfy the initial non-federal schools? because State A is availing itself of the
matching requirement) would be subject Yes, payments from the Fund may be $500 per elementary and secondary
to recoupment. used to cover costs associated with school student presumption, State A
providing distance learning (e.g., the also may use Fund payments to expand
50. At what point would costs be broadband capacity and to hire new
considered to be incurred in the case of cost of laptops to provide to students) or
teachers, but it may not use Fund
a grant made by a State, local, or tribal for in-person learning (e.g., the cost of
payments to acquire additional
government to cover interest and acquiring personal protective equipment
furniture.
principal amounts of a loan, such as for students attending schools in-person
might be provided as part of a small or other costs associated with meeting 54. May Fund recipients upgrade
business assistance program in which Centers for Disease Control guidelines). critical public health infrastructure,
the loan is made by a private Treasury recognizes that schools are such as providing access to running
institution? generally incurring an array of COVID– water for individuals and families in
19-related expenses to either provide rural and tribal areas to allow them to
A grant made to cover interest and distance learning or to re-open. To this maintain proper hygiene and defend
principal costs of a loan, including end, as an administrative convenience, themselves against the virus?
interest and principal due after the Treasury will presume that expenses of Yes, fund recipients may use
period that begins on March 1, 2020, up to $500 per elementary and payments from the Fund to upgrade
and ends on December 31, 2021 (the secondary school student are eligible public health infrastructure, such as
‘‘covered period’’), will be considered to expenditures, such that schools do not providing individuals and families
be incurred during the covered period if need to document the specific use of access to running water to help reduce
(i) the full amount of the loan is funds up to that amount. the further spread of the virus. As
advanced to the borrower within the If a Fund recipient avails itself of the required by the CARES Act, expenses
covered period and (ii) the proceeds of presumption in accordance with the associated with such upgrades must be
the loan are used by the borrower to previous paragraph with respect to a incurred by December 31, 2021. Please
cover expenses incurred during the school, the recipient may not also cover see Treasury’s Guidance as updated on
covered period. In addition, if these the costs of additional re-opening aid to June 30 regarding when a cost is
conditions are met, the amount of the that school other than those associated considered to be incurred for purposes
grant will be considered to have been with the following, in each case for the of the requirement that expenses be
used during the covered period for purpose of addressing COVID–19: incurred within the covered period.
purposes of the requirement that • Expanding broadband capacity;
• hiring new teachers; 55. How does a government address the
expenses be incurred within the covered requirement that the allowable
period. Such a grant would be • developing an online curriculum;
• acquiring computers and similar expenditures are not accounted for in
analogous to a loan provided by the the budget most recently approved as of
Fund recipient itself that incorporates digital devices;
• acquiring and installing additional March 27, 2020, once the government
similar loan forgiveness provisions. As enters its new budget year on July 1,
with any other assistance provided by a ventilation or other air filtering
equipment; 2020 (for governments with June 30
Fund recipient, such a grant would need fiscal year ends) or October 1, 2020 (for
to be determined by the recipient to be • incurring additional transportation
costs; or governments with September 30 year
necessary due to the public health ends)?
emergency. • incurring additional costs of
providing meals. As provided in the Guidance, the
51. If governments use Fund payments Across all levels of government, the ‘‘most recently approved’’ budget refers
as described in the Guidance to presumption is limited to $500 per to the enacted budget for the relevant
establish a grant program to support student, e.g., if a school is funded by a fiscal period for the particular
businesses, would those funds be state and a local government, the government, without taking into
considered gross income taxable to a presumption claimed by each recipient account subsequent supplemental
business receiving the grant under the must add up to no more than $500. appropriations enacted or other
Internal Revenue Code (Code)? Furthermore, if a Fund recipient uses budgetary adjustments made by that
the presumption with respect to a government in response to the COVID–
Please see the answer provided by the school, any other Fund recipients 19 public health emergency. A cost is
Internal Revenue Service (IRS) available providing aid to that school may not use not considered to have been accounted
at https://www.irs.gov/newsroom/cares- the Fund to cover the costs of additional for in a budget merely because it could
act-coronavirus-relief-fund-frequently- aid to schools other than with respect to be met using a budgetary stabilization
asked-questions. the specific costs listed above. fund, rainy day fund, or similar reserve
52. If governments use Fund payments The following examples help account.
as described in the Guidance to illustrate how the presumption may or Furthermore, the budget most recently
establish a loan program to support may not be used: approved as of March 27, 2020, provides
businesses, would those funds be Example 1: State A may transfer Fund the spending baseline against which
considered gross income taxable to a payments to each school district in the expenditures should be compared for
business receiving the loan under the State totaling $500 per student. State A purposes of determining whether they
Code? does not need to document the specific may be covered using payments from
use of the Fund payments by the school the Fund. This spending baseline will
Please see the answer provided by the districts within the State. carry forward to a subsequent budget
IRS available at https://www.irs.gov/ Example 2: Suppose State A from year if a Fund recipient enters a
newsroom/cares-act-coronavirus-relief- example 1 transferred Fund payments to different budget year between March 27,
fund-frequently-asked-questions. the school districts in the State in the 2020 and December 31, 2021. The
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Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4193
spending baseline may be carried 19 public health emergency. In the recipient should not rely on self-
forward without adjustment for context of acquisitions of real estate and certifications provided to the SBA.
inflation. acquisitions of equipment, this means If the grant is being provided to the
that the acquisition itself must be small business to assist with particular
56. Does the National Environmental
necessary. In particular, a government expenditures, the business must not
Policy Act, 42 U.S.C. 4321 et seq,
(NEPA) apply to projects supported by must (i) determine that it is not able to have already used the PPP or EIDL loan
payments from the Fund? meet the need arising from the public or grant for those expenditures. The
health emergency in a cost-effective assistance provided from the Fund
NEPA does not apply to Treasury’s manner by leasing property or would need to satisfy all of the other
administration of the Fund. Projects equipment or by improving property requirements set forth in section 601(d)
supported with payments from the Fund already owned and (ii) maintain of the Social Security Act as discussed
may still be subject to NEPA review if documentation to support this in Treasury’s guidance and FAQs, and
they are also funded by other federal determination. Likewise, an the business would need to comply with
financial assistance programs improvement, such as the installation of all applicable requirements of the PPP
57. Public universities have incurred modifications to permit social or EIDL program.
expenses associated with providing distancing, would need to be Treasury’s Office of Inspector General
refunds to students for education- determined to be necessary to address has provided the following guidance in
related expenses, including tuition, the COVID–19 public health emergency. its FAQ no. 75 on reporting and
room and board, meal plans, and other Previous guidance regarding the recordkeeping that would apply to the
fees (such as activities fees). Are these requirement that payments from the recipient:
types of public university student Fund may only be used to cover costs The prime recipient is responsible for
refunds eligible uses of Fund payments? that were incurred during the period determining the level and detail of
that begins on March 1, 2020, and ends documentation needed from the sub-
If the responsible government official
on December 31, 2021 focused on the recipient of small business assistance to
determines that expenses incurred to
acquisition of goods and services and satisfy [the requirements of section
refund eligible higher education
leases of real property and equipment, 601(d) of the Social Security Act],
expenses are necessary and would be
but the same principles apply to however, there would need to be some
incurred due to the public health
acquisitions and improvements of real proof that the small business was
emergency, then such expenses would
property and acquisitions of equipment. impacted by the public health
be eligible as long as the expenses
Such acquisitions and improvements emergency and was thus eligible for the
satisfy the other criteria set forth in
must be completed and the acquired or CRF funds.
section 601(d) of the Social Security
improved property or acquisition of In the above OIG FAQ, ‘‘sub-
Act. Eligible higher education expenses
equipment be put to use in service of recipient’’ refers to the beneficiary of the
may include, in the reasonable
the COVID–19-related use for which it assistance, i.e., the small business.
judgment of the responsible government
official, refunds to students for tuition, was acquired or improved by December B. Questions Related to Administration
room and board, meal plan, and other 30. Finally, as with all costs covered of Fund Payments
fees (such as activities fees). Fund with payments from the Fund, such
costs must not have been previously 1. Do governments have to return
payments may not be used for expenses
accounted for in the budget most unspent funds to Treasury?
that have been or will be reimbursed by
another federal program (including, for recently approved as of March 27, 2020. Yes. Section 601(f)(2) of the Social
example, the Higher Education 59. If a small business received a Small Security Act, as added by section
Emergency Relief Fund administered by Business Administration (SBA) Payment 5001(a) of the CARES Act, provides for
the Department of Education). Protection Program (PPP) or Economic recoupment by the Department of the
Injury Disaster Loan (EIDL) grant or loan Treasury of amounts received from the
58. May payments from the Fund be Fund that have not been used in a
used for real property acquisition and due to COVID–19, may the small
business also receive a grant from a unit manner consistent with section 601(d)
improvements and to purchase of the Social Security Act. If a
equipment to address the COVID–19 of government using payments from the
Fund? government has not used funds it has
public health emergency? received to cover costs that were
The expenses of acquiring or Receiving a PPP or EIDL grant or loan incurred by December 31, 2021, as
improving real property and of for COVID–19 would not necessarily required by the statute, those funds
acquiring equipment (e.g., vehicles) may make a small business ineligible to must be returned to the Department of
be covered with payments from the receive a grant from Fund payments the Treasury.
Fund in certain cases. For example, made to a recipient. As discussed in
Treasury’s initial guidance referenced previous Treasury guidance on use of 2. What records must be kept by
coverage of the costs of establishing the Fund, a recipient’s small business governments receiving payment?
temporary public medical facilities and assistance program should be tailored to A government should keep records
other measures to increase COVID–19 assist those businesses in need of such sufficient to demonstrate that the
treatment capacity, including related assistance. In assessing the business’ amount of Fund payments to the
construction costs, as an eligible use of need for assistance, the recipient would government has been used in
funds. Any such use must be consistent need to take into account the business’ accordance with section 601(d) of the
with the requirements of section 601(d) receipt of the PPP or EIDL loan or grant. Social Security Act.
of the Social Security Act as added by If the business has received a loan from
the SBA that may be forgiven, the 3. May recipients deposit Fund
the CARES Act.
As with all uses of payments from the recipient should assume for purposes of payments into interest bearing
Fund, the use of payments to acquire or determining the business’ need that the accounts?
improve property is limited to that loan will be forgiven. In determining the Yes, provided that if recipients
which is necessary due to the COVID– business’ eligibility for the grant, the separately invest amounts received from
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4194 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices
the Fund, they must use the interest subrecipient monitoring and territory, local government, or tribal
earned or other proceeds of these management, and subpart F regarding government that received a payment
investments only to cover expenditures audit requirements. directly from Treasury. However,
incurred in accordance with section subrecipients would not include
9. Is there a Catalog of Federal Domestic
601(d) of the Social Security Act and the individuals and organizations (e.g.,
Assistance (CFDA) number assigned to businesses, non-profits, or educational
Guidance on eligible expenses. If a
the Fund? institutions) that are beneficiaries of an
government deposits Fund payments in
a government’s general account, it may Yes. The CFDA number assigned to assistance program established using
use those funds to meet immediate cash the Fund is 21.019. payments from the Fund. The Single
management needs provided that the 10. If a State transfers Fund payments to Audit Act and 2 CFR part 200, subpart
full amount of the payment is used to its political subdivisions, would the F regarding audit requirements do not
cover necessary expenditures. Fund apply to beneficiaries.
transferred funds count toward the
payments are not subject to the Cash Please see Treasury Office of
subrecipients’ total funding received
Management Improvement Act of 1990, Inspector General FAQs at https://
from the federal government for www.treasury.gov/about/organizational-
as amended. purposes of the Single Audit Act? structure/ig/Audit%20Reports
4. May governments retain assets Yes. The Fund payments to %20and%20Testimonies/OIG-CA-20-
purchased with payments from the subrecipients would count toward the 028.pdf regarding reporting in the
Fund? threshold of the Single Audit Act and 2 GrantSolutions portal.
Yes, if the purchase of the asset was CFR part 200, subpart F re: audit Dated: January 11, 2021.
consistent with the limitations on the requirements. Subrecipients are subject Alexandra H. Gaiser,
eligible use of funds provided by section to a single audit or program-specific
Executive Secretary.
601(d) of the Social Security Act. audit pursuant to 2 CFR 200.501(a)
[FR Doc. 2021–00827 Filed 1–14–21; 8:45 am]
when the subrecipients spend $750,000
5. What rules apply to the proceeds of or more in federal awards during their BILLING CODE 4810–25–P
disposition or sale of assets acquired fiscal year.
using payments from the Fund?
11. Are recipients permitted to use DEPARTMENT OF VETERANS
If such assets are disposed of prior to
payments from the Fund to cover the AFFAIRS
December 31, 2021, the proceeds would
expenses of an audit conducted under
be subject to the restrictions on the Joint Biomedical Laboratory Research
the Single Audit Act?
eligible use of payments from the Fund and Development and Clinical Science
provided by section 601(d) of the Social Yes, such expenses would be eligible Research and Development Services
Security Act. expenditures, subject to the limitations Scientific Merit Review Board,
set forth in 2 CFR 200.425. Amended Notice of Meeting
6. Are Fund payments to State,
territorial, local, and tribal governments 12. If a government has transferred The Department of Veterans Affairs
subject to the provisions of the Uniform funds to another entity, from which (VA) gives notice under Federal
Guidance applicable to grant entity would the Treasury Department Advisory Committee Act, 5 U.S.C.
agreements? seek to recoup the funds if they have not App.2, that a meeting of the Joint
been used in a manner consistent with Biomedical Laboratory Research and
No. Fund payments made by Treasury
section 601(d) of the Social Security Development and Clinical Science
to State, territorial, local, and Tribal
Act? Research and Development Services
governments do not entail grant
agreements and thus the provisions of The Treasury Department would seek Scientific Merit Review Board (JBL/CS
the Uniform Guidance (2 CFR part 200) to recoup the funds from the SMRB) will be held Thursday, January
applicable to grant agreements do not government that received the payment 21, 2021, via WebEx. The meeting will
apply. The payments constitute ‘‘other directly from the Treasury Department. begin at 3:00 p.m. and end at 5:00 p.m.
financial assistance’’ under 2 CFR State, territorial, local, and Tribal Eastern daylight time. The meeting will
200.40. governments receiving funds from have an open session from 3:00 p.m.
Treasury should ensure that funds until 3:30 p.m. and a closed session
7. Are Fund payments considered transferred to other entities, whether from 3:30 p.m. until 5:00 p.m.
federal financial assistance for purposes pursuant to a grant program or The purpose of the open session is to
of the Single Audit Act? otherwise, are used in accordance with meet with the JBL/CS Service Directors
Yes, Fund payments are considered to section 601(d) of the Social Security Act to discuss the overall policies and
be federal financial assistance subject to as implemented in the Guidance. process for scientific review, as well as
the Single Audit Act (31 U.S.C. 7501– disseminate information among the
13. What are the differences between a Board members regarding the VA
7507) and the related provisions of the
subrecipient and a beneficiary under the research priorities.
Uniform Guidance, 2 CFR 200.303
Fund for purposes of the Single Audit The purpose of the closed session is
regarding internal controls, §§ 200.330
Act and 2 CFR part 200, subpart F to provide recommendations on the
through 200.332 regarding subrecipient
regarding audit requirements? scientific quality, budget, safety and
monitoring and management, and
subpart F regarding audit requirements. The Single Audit Act and 2 CFR part mission relevance of investigator-
200, subpart F regarding audit initiated research applications
8. Are Fund payments subject to other requirements apply to any non-federal submitted for VA merit review
requirements of the Uniform Guidance? entity, as defined in 2 CFR 200.69, that evaluation. Applications submitted for
Fund payments are subject to the receives payments from the Fund in the review include various medical
following requirements in the Uniform amount of $750,000 or more. Non- specialties within the general areas of
Guidance (2 CFR part 200): 2 CFR federal entities include subrecipients of biomedical, behavioral and clinical
200.303 regarding internal controls, 2 payments from the Fund, including science research. The JBL/CS SMRB
CFR 200.330 through 200.332 regarding recipients of transfers from a State, meeting will be closed to the public for
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