The Coronavirus State & Local Fiscal Recovery Funds Final Rule
On January 6, 2022, the US Treasury released the Coronavirus State and Local Fiscal Recovery Funds Final Rule. The Final Rule is effective April 1, 2022, and provides much-anticipated clarification. The Interim Final Rule is still effective through March 31, but the Final Rule can be implemented prior to its effective date. Please note, the US Treasury frequently asked questions and the Compliance and Reporting guidance has not been updated for the final rule provisions.
Here are our top three takeaways from our first look at the Final Rule:
- The biggest and most exciting change from the Interim to Final Rule is centered around revenue loss calculations. In lieu of calculating revenue loss at specific points in time, governments are now allowed to use a standard allowance of $10 million. If a calculation is performed, general revenues may now include all city-owned utilities and liquor store revenue.
- Capital expenditure definitions have been broadened and more clearly defined, along with clarification that the US Treasury does not need to preapprove specific projects.
- Water, Sewer, and Stormwater infrastructure project eligibility have been broadened. Previously, eligible projects were restricted to eligibility under the Clean Water State Revolving Fund or Drinking Water State Revolving Fund. Under the Final Rule, eligibility is determined based on necessity. The final rule provides detailed explanations regarding what is considered necessary and examples of allowable projects.
The Final Rule is very detailed and provides clarification on many more areas. Each eligibility area includes treasury responses to public comments. Below you will find the links to the Final Rule and a helpful overview.
Please reach out to your contact at Abdo or Bonnie Schwieger, Senior Audit Manager (email@example.com), with any questions.
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