An Introduction to the Guidance on Distributions to Nonentitlement Units of Local Government (U.S. Department of the Treasury, May-June 2021)
Summary
A U.S. Department of the Treasury webinar deck for state governments, marked DRAFT | PRE-DECISIONAL and dated May-June 2021, introducing the guidance on distributions of Coronavirus State and Local Fiscal Recovery Funds to nonentitlement units of local government (NEUs), local governments typically serving populations of under 50,000. It states that Treasury released the guidance on May 24 and sets out a four-step process for states: pre-distribution, initial distribution, subsequent distribution and post-distribution. The deck explains the population-based allocation formula and the 75 percent budget cap, with an example in which Town A, allocated $100,000, would be capped at $75,000. It also previews the list of local governments for 36 states with no overlapping jurisdictions or weak MCDs, 11 states with overlapping populations and 8 weak-MCD states.
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“An Introduction to the Guidance on Distributions to Nonentitlement Units of Local Government (U.S. Department of the Treasury, May-June 2021).”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/ppr-int-19672db98412b0c8-overview-of-neu-distribution-guidance-webinar-deck-for-state-governments-7c3e98fef0/
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AN INTRODUCTION TO THE
Guidance on Distributions to Nonentitlement
Units of Local Government
DRAFT | PRE-DECISIONAL
May-June 2021
About This Webinar
The U.S. Department of the Treasury is providing this webinar, the State and Local contact
channels, and other resources for informational purposes.
The descriptions provided in this document are non-exhaustive, do not describe all terms and
conditions associated with the use of Coronavirus State and Local Fiscal Recovery Funds, and do
not describe all requirements that may apply to this funding.
Any Coronavirus State and Local Fiscal Recovery Funds received will be subject to the terms and
conditions of the agreement entered into by Treasury and the respective jurisdiction, which
incorporate the provisions of the Interim Final Rule and guidance that implements this program.
Treasury is accepting public comment on all aspects of the Interim Final Rule, which Treasury will
consider in developing the Final Rule on the program.
DRAFT | 2
Introductions
On May 24, Treasury released guidance to assist states with distributions to
nonentitlement units of local government (NEUs), which are local governments typically
serving populations of under 50,000.
This webinar provides a process and technical overview of the guidance for
representatives of state governments and key associations.
DRAFT | 3
Agenda
SECTION 1: Overview of the Guidance
SECTION 2: Overview of the List of Local Governments
SECTION 3: Q&A
DRAFT | 4
SECTION 1: Overview of the Guidance
Key Guidance Documents
There are four key guidance documents for state governments focused on the allocation and
distribution of funds from states to NEUs.
Guidance List of Local
Governments
Definitional and Data Aggregate NEU
Methodology allocations for states
DRAFT | 6
Key Guidance Documents
There are four key guidance documents for state governments focused on the allocation and
distribution of funds from states to NEUs.
Guidance List of Local
Governments
Definitional and Data Aggregate NEU
Methodology allocations for states
DRAFT | 7
Overview of the Guidance Process
State governments will follow a four-step process to allocate and distribute funds to
NEUs.
• Request the state’s payment from Treasury
• Identify eligible NEUs
1 Pre-Distribution • Calculate initial allocations
• Establish a process and receive requests for funding
• Disburse the initial distribution of payments
• Record key information for reporting purposes
2 • Provide guidance to NEUs on their requirements to Treasury
Initial Distribution
• Apply for extensions, if necessary
• Gather required information on “remaining funds”
• Allocate remaining funds, including applying the 75% cap
3 • Disburse the subsequent distribution
Subsequent Distribution • Record key information for reporting purposes
• Submit interim and other reports to Treasury on distributions
• Return excess amounts
4 • Provide guidance to NEUs on their reporting requirements
Post-Distribution • Await Second Tranche amount
DRAFT | 8
Overview of the Guidance Process
State governments will follow a four-step process to allocate and distribute funds to
NEUs.
• Request the state’s payment from Treasury
• Identify eligible NEUs
1 Pre-Distribution • Calculate initial allocations
• Establish a process and receive requests for funding
• Disburse the initial distribution of payments
• Record key information for reporting purposes
2 • Provide guidance to NEUs on their requirements to Treasury
Initial Distribution
• Apply for extensions, if necessary
• Gather required information on “remaining funds”
• Allocate remaining funds, including applying the 75% cap
3 • Disburse the subsequent distribution
Subsequent Distribution • Record key information for reporting purposes
• Submit interim and other reports to Treasury on distributions
• Return excess amounts
4 • Provide guidance to NEUs on their reporting requirements
Post-Distribution • Await Second Tranche amount
DRAFT | 9
Pre-Distribution Phase (Request Payment + Identify Eligible NEUs) 1
1• Request the state’s payment from Treasury
– State governments that have made a request for their own funds in the Treasury
Submission Portal will be considered by Treasury to have requested funding for their
NEUs as well
– State governments should expect to receive their First Tranche of payments for
distribution to their NEUs within a few days of submission
2• Identify eligible NEUs from list of local governments on Treasury website
Incorporated Places Minor Civil Divisions (MCDs)
42 states
No-MCD and All governments on list are eligible
strong-MCD states
8 weak-MCD State must undertake facts-and-
states All governments on list circumstances test and post explanation of
IL, IN, KS, MO, NE, are eligible exclusions on website
ND, OH, SD Test: “whether the MCD has the legal and
operational capacity to accept ARPA funds
and provides a broad range of services
that would constitute eligible uses
under ARPA”
DRAFT | 10
Pre-Distribution Phase (Calculate Initial Allocations) 1
3• Calculate initial allocations with general formula (for all states)
𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑡ℎ𝑒 𝑁𝐸𝑈
× 𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 𝑠𝑡𝑎𝑡𝑒 𝑁𝐸𝑈 𝑝𝑎𝑦𝑚𝑒𝑛𝑡
𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑎𝑙𝑙 𝑒𝑙𝑖𝑔𝑖𝑏𝑙𝑒 𝑁𝐸𝑈𝑠
For overlapping jurisdictions (CT, IL, IN, KS, MI, MN, MO, NE, NY, OH, VT):
1 Allocate overlapping 2 Split overlapping 3 Allocate overlapping 4 Double count
population only to population between population overlapping
subsidiary parent & subsidiary only to parent Population
(e.g., 50-50)
(Based on facts-and-
circumstances test)
DRAFT | 11
Pre-Distribution Phase (Establish Process + Receive Requests) 1
4• Establish process for NEUs to request payment
– Collect the following information
» Local government name, Entity’s Taxpayer Identification Number, DUNS number, and
address
» Authorized representative name, title, and email
» Contact person name, title, phone, and email
» Financial institution information
» NEU reference budget
» Award terms and conditions agreement
» Assurances of compliance with Title VI of the Civil Rights Act of 1964
– Should confirm that the NEU is not excluded or disqualified on SAM.gov
– Should advise the NEU to register in SAM.gov as soon as possible after receiving the
award if the NEU is not already registered
– Should assign each NEU a “NEU Recipient Number”
DRAFT | 12
Pre-Distribution Phase (Establish Process + Receive Requests) 1
5• Receive requests for payment and transfers
Scenario A: Scenario B: Scenario C:
NEU requests payment NEU requests transfer to state NEU is unresponsive
• State must compare NEU • NEUs can decline their • Funds can be re-
budget total with allocation funding and transfer funds allocated in a
in order to apply the “75 to the state under Section subsequent distribution
percent budget cap” 603(c)(4) (detailed later)
• Ex: If Town A is allocated • NEU must submit signed
Key $100,000 and its reference Treasury form to state,
Steps budget totaled $100,000, which the state must
Town A would be capped at transmit to Treasury as
$75,000 ($25,000 withheld part of interim report
across both Tranches;
$12,500 withheld from First
Tranche)
DRAFT | 13
Overview of the Guidance Process
State governments will follow a four-step process to allocate and distribute funds to
NEUs.
• Request the state’s payment from Treasury
• Identify eligible NEUs
1 Pre-Distribution • Calculate initial allocations
• Establish a process and receive requests for funding
• Disburse the initial distribution of payments
• Record key information for reporting purposes
2 • Provide guidance to NEUs on their requirements to Treasury
Initial Distribution
• Apply for extensions, if necessary
• Gather required information on “remaining funds”
• Allocate remaining funds, including applying the 75% cap
3 • Disburse the subsequent distribution
Subsequent Distribution • Record key information for reporting purposes
• Submit interim and other reports to Treasury on distributions
• Return excess amounts
4 • Provide guidance to NEUs on their reporting requirements
Post-Distribution • Await Second Tranche amount
DRAFT | 14
Initial Distribution from First Tranche 2
1• Disburse the initial distribution of payments
– States may not impose additional conditions or requirements on distributions to NEUs,
beyond those permitted by the statute, IFR, or Treasury’s guidance
2• Record key information for reporting purposes
– States should keep records of allocations and amounts paid for submission to Treasury
in interim report
3• Provide guidance to NEUs on their requirements to Treasury
– States should direct NEUs to the statute, IFR, guidance, along with documents on the
website, including Checklist for Nonentitlement Units of Local Government
4• Apply for extensions, if necessary
– Statutory “30-day” clock begins once a state receives a payment for its NEUs
– Treasury will grant a 30-day extension if state can certify excessive administrative
burden
DRAFT | 15
Overview of the Guidance Process
State governments will follow a four-step process to allocate and distribute funds to
NEUs.
• Request the state’s payment from Treasury
• Identify eligible NEUs
1 Pre-Distribution • Calculate initial allocations
• Establish a process and receive requests for funding
• Disburse the initial distribution of payments
• Record key information for reporting purposes
2 • Provide guidance to NEUs on their requirements to Treasury
Initial Distribution
• Apply for extensions, if necessary
• Gather required information on “remaining funds”
• Allocate remaining funds, including applying the 75% cap
3 • Disburse the subsequent distribution
Subsequent Distribution • Record key information for reporting purposes
• Submit interim and other reports to Treasury on distributions
• Return excess amounts
4 • Provide guidance to NEUs on their reporting requirements
Post-Distribution • Await Second Tranche amount
DRAFT | 16
Subsequent Distribution from First Tranche 3
States may issue a subsequent distribution of the funds that had been allocated to non-
responsive NEUs
1• Gather required information on “remaining funds”
– Remaining funds are amounts allocated to non-responsive NEUs
» Non-responsive means NEUs that have neither requested funding nor declined allocation
and requested a transfer to the state
– Remaining funds can be allocated among “residual NEUs” (NEUs that requested funding or
transferred funding to state and whose allocation was below the 75 percent cap)
2• Allocate remaining funds, including applying the 75 percent cap
𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝. 𝑜𝑓 𝑡ℎ𝑒 𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑁𝐸𝑈
– Formula: 𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝. 𝑜𝑓 𝑎𝑙𝑙 𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑁𝐸𝑈𝑠
× 𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 𝑠𝑡𝑎𝑡𝑒 𝑎𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 𝑁𝐸𝑈 𝑎𝑙𝑙𝑜𝑐𝑎𝑡𝑖𝑜𝑛
– Total allocation, including remaining funds, must not exceed 75 percent cap
3• Disburse subsequent distribution
– States are similarly prohibited from putting additional conditions or requirements on these
distributions
4• Record key information for reporting purposes
– States should keep records of the residual NEUs that received a subsequent distribution, and
the amount of the allocation and distribution
DRAFT | 17
Overview of the Guidance Process
State governments will follow a four-step process to allocate and distribute funds to
NEUs.
• Request the state’s payment from Treasury
• Identify eligible NEUs
1 Pre-Distribution • Calculate initial allocations
• Establish a process and receive requests for funding
• Disburse the initial distribution of payments
• Record key information for reporting purposes
2 • Provide guidance to NEUs on their requirements to Treasury
Initial Distribution
• Apply for extensions, if necessary
• Gather required information on “remaining funds”
• Allocate remaining funds, including applying the 75% cap
3 • Disburse the subsequent distribution
Subsequent Distribution • Record key information for reporting purposes
• Submit an update on distributions with periodic reports
• Return excess amounts
4 • Provide guidance to NEUs on their reporting requirements
Post-Distribution • Await Second Tranche amount
DRAFT | 18
Post-Distribution 4
1• Submit an update on distributions with its interim report (August 2021) and first quarterly report
(October 2021)
– States should be prepared to include in their interim report the following:
» Whether NEU received funding, declined funding and requested a transfer to the state, or has
not taken action on its funding
» NEU name
» NEU DUNS number
» NEU address
» NEU email address
» NEU Recipient Number
» Initial allocation and, if applicable, subsequent allocation to the NEU (before 75 percent cap)
» NEU reference budget
» Amount of the initial and, if applicable, subsequent allocation above 75 percent of the NEU’s
reference budget which will be returned to Treasury
» Payment amount(s)
» Payment date(s)
– States should also provide transfer forms signed by the NEU (if applicable) and weak-MCD states
should list MCDs that the state deemed ineligible
DRAFT | 19
Post-Distribution 4
2• Return excess amounts (August-October 2021)
– Treasury will provide instructions to states on the return of funds
3• Provide guidance to NEUs on their reporting requirements to Treasury (October 2021)
– NEUs will be asked to provide the following in their first report to Treasury due October 2021,
among other requirements:
» NEU Recipient Number
» Copy of signed award terms and conditions agreement
» Copy of signed assurances of compliance with Title VI of the Civil Rights Act of 1964
» Copy of actual budget documents validating the top-line budget total provided to the state
as part of the request for funding
4• Await Second Tranche amount (Spring-Summer 2022)
– Treasury will distribute the Second Tranche no earlier than 12 months after the date on which
the First Tranche of payments is paid to the state
– More information will be forthcoming
DRAFT | 20
SECTION 2: Overview of the List of Local Governments
Key Guidance Documents
There are four key guidance documents for state governments focused on the allocation and
distribution of funds from states to NEUs.
Guidance List of Local
Governments
Definitional and Data Aggregate NEU
Methodology allocations for states
DRAFT | 22
Overview of List of Local Governments
• Orientation to the spreadsheet, including Contents and
1 Overview tabs
“Straightforward” • Preview of list for majority of states (36) that have no
2 States overlapping jurisdictions or weak MCDs
States with • Preview of list for 11 states with overlapping populations
• CT, IL, IN, KS, MI, MN, MO, NE, NY, OH, VT
3 Overlapping
Populations
• Preview of list for 8 weak-MCD states
4 Weak-MCD States • IL, IN, KS, MO, NE, ND, OH, SD
DRAFT | 23
Overview 1
The spreadsheet has one list for all states except for the 8 weak-MCD states, which have two
lists each
Spreadsheet Snapshot
All states except the weak-
MCD states receive one list
Weak-MCD states receive
two lists (one with and one
without MCDs)
DRAFT | 24
“Straightforward” States 2
Below is a preview of the list for the majority of states (36 states) that have no overlapping
jurisdictions or weak MCDs
Spreadsheet Snapshot
These states can
directly apply
the statutory
formula for
individual NEU
allocations
DRAFT | 25
States with Overlapping Populations 3
Below is a preview of the list for 11 states with overlapping jurisdictions
CT, IL, IN, KS, MI, MN, MO, NE, NY, OH, VT
Spreadsheet Snapshot
These states should apply the
guidance to allocate the overlapping
population (Newtown borough)
between the parent (Newtown town)
and the subsidiary (Newtown borough)
DRAFT | 26
Weak-MCD States 4
Below is a preview of the list for 8 weak-MCD states
IL, IN, KS, MO, NE, ND, OH, SD
Spreadsheet Snapshot
A List including MCDs
B List excluding MCDs
These states should apply the
guidance’s “facts-and-circumstances”
test to determine whether the MCD is
eligible for an NEU payment
DRAFT | 27
SECTION 3: Q&A
For More Information:
Please visit Treasury’s State & Local website
at www.treasury.gov/SLFRP
Thank you. For Media Inquiries:
Please contact the U.S. Treasury Press Office
at (202) 622-2960
For General Inquiries:
Please email SLFRP@treasury.gov
DRAFT | 29
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