Federal Register/Vol. 86, No. 10/Friday, January 15, 2021/Notices

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As noted previously on Treasury’s website, on

June 30, 2020, the guidance provided under ‘‘Costs

incurred during the period that begins on March 1,

2020, and ends on December 30, 2020’’ was

updated. On September 2, 2020, the ‘‘Supplemental

Guidance on Use of Funds to Cover Payroll and

Benefits of Public Employees’’ and ‘‘Supplemental

Guidance on Use of Funds to Cover Administrative

Costs’’ sections were added.

As noted previously on Treasury’s website, on

August 10, 2020, the frequently asked questions

were revised to add Questions A.49–52. On

September 2, 2020, Questions A.53–56 were added

and Questions A.34 and A.38 were revised. On

October 19, 2020, Questions A.57–59 and B.13 were

added and Questions A.42, 49, and 53 were revised.

Section 1001 of Division N of the Consolidated

Appropriations Act, 2021 amended section

601(d)(3) of the Social Security Act by extending

the end of the covered period for Coronavirus Relief

Fund expenditures from December 30, 2020 to

December 31, 2021.

ADDRESSES

: Direct all written comments

to Kinna Brewington, Internal Revenue

Service, room 6526, 1111 Constitution

Avenue NW, Washington, DC 20224.

FOR FURTHER INFORMATION CONTACT

Requests for additional information or

copies of the form should be directed to

Kerry Dennis, at (202) 317–5751 or

Internal Revenue Service, Room 6526,

1111 Constitution Avenue NW,

Washington DC 20224, or through the

internet, at [email protected].

SUPPLEMENTARY INFORMATION

: Title:

Sales of Business Property.

OMB Number: 1545–0184.

Form Number: Form 4797.

Abstract: Form 4797 is used by

taxpayers to report sales, exchanges, or

involuntary conversions of assets used

in a trade or business. It is also used to

compute ordinary income from

recapture and the recapture of prior year

losses under section 1231 of the Internal

Revenue Code.

Current Actions: There is no change

in the paperwork burden previously

approved by OMB. The forms are being

submitted for renewal purposes only.

Type of Review: Extension of a

currently approved collection.

Affected Public: Business or other for-

profit organizations, individuals or

households, and farms.

Estimated Number of Respondents:

325,000.

Estimated Time per Response: 50

hours, 38 minutes.

Estimated Total Annual Burden

Hours: 16,454,750.

The following paragraph applies to all

the collections of information covered

by this notice.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid OMB control number.

Books or records relating to a collection

of information must be retained if their

contents may become material in the

administration of any internal revenue

law. Generally, tax returns and tax

return information are confidential, as

required by 26 U.S.C. 6103.

Request for Comments: Comments

submitted in response to this notice will

be summarized and/or included in the

request for OMB approval. All

comments will become a matter of

public record. Comments are invited on:

(a) Whether the collection of

information is necessary for the proper

performance of the functions of the

agency, including whether the

information shall have practical utility;

(b) the accuracy of the agency’s estimate

of the burden of the collection of

information; (c) ways to enhance the

quality, utility, and clarity of the

information to be collected; (d) ways to

minimize the burden of the collection of

information on respondents, including

through the use of automated collection

techniques or other forms of information

technology; and (e) estimates of capital

or start-up costs and costs of operation,

maintenance, and purchase of services

to provide information.

Approved: January 12, 2021.

Chakinna B. Clemons,

Supervisory Tax Analyst.

[FR Doc. 2021–00841 Filed 1–14–21; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Coronavirus Relief Fund for States,

Tribal Governments, and Certain

Eligible Local Governments

AGENCY

: Department of the Treasury.

ACTION

: Coronavirus Relief Fund

program guidance.

SUMMARY

: The Department of the

Treasury (Treasury) is re-publishing in

final form the guidance it previously

made available on its website regarding

the Coronavirus Relief Fund for States,

tribal governments, and certain eligible

local governments.

FOR FURTHER INFORMATION CONTACT

Stephen T. Milligan, Deputy Assistant

General Counsel (Banking & Finance),

202–622–4051.

SUPPLEMENTARY INFORMATION

: Section

601 of the Social Security Act, as added

by section 5001(a) of Division A of the

Coronavirus Aid, Relief, and Economic

Security Act (‘‘CARES Act’’) established

the Coronavirus Relief Fund (the

‘‘Fund’’) and appropriated $150 billion

for payments by Treasury to States,

tribal governments, and certain local

governments.

The Secretary of the Treasury has

adopted this guidance for recipients of

payments from the Fund pursuant to his

authority under the Social Security Act

to adopt rules and regulations as may be

necessary to the efficient administration

of the functions with which he is

charged under the Social Security Act.

42 U.S.C. 1302(a). This guidance

primarily concerns the use of payments

from the Fund set forth in section 601(d)

of the Social Security Act. Treasury’s

Office of Inspector General (OIG) will

use this guidance in its audits of

recipients’ use of funds. Section

601(f)(2) of the Social Security Act

provides that if the Treasury OIG

determines that a recipient of payments

from the Fund has failed to comply with

the use of funds provisions of section

601(d), the amount equal to the amount

of funds used in violation of such

subsection shall be booked as a debt of

such entity owed to the federal

government.

The guidance published below is

unchanged from the last version of the

guidance dated September 2, 2020,

and

the frequently asked questions

document dated October 19, 2020,

each

of which was published on Treasury’s

website, except for the following

changes. The introduction of the

guidance and frequently asked

questions have been modified to reflect

this publication in the Federal Register;

the guidance and frequently asked

questions have been revised throughout

to reflect that the end date of the period

during which eligible expenses may be

incurred has been extended to

December 31, 2021;

footnote 2 of the

guidance has been revised to reflect

additional restrictions imposed by

section 5001(b) of Division A the

CARES Act; FAQ A.59 has been

updated to correct the cross-reference to

Treasury OIG’s FAQs; and the

application of FAQ B.6 has been

clarified. Treasury is also adding to the

guidance instructions regarding the

return to Treasury of unused

Coronavirus Relief Fund payments.

Administrative Procedure Act

The Administrative Procedure Act

(APA) provides that the notice, public

comment, and delayed effective date

requirements of 5 U.S.C. 553 do not

apply ‘‘to the extent that there is

involved . . . a matter relating to agency

management or personnel or to public

property, loans, grants, benefits, or

contracts.’’ 5 U.S.C. 553(a). The rule

involves a matter relating to public

property, loans, grants, benefits, or

contracts and is therefore exempt under

the terms of the APA.

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See Section 601(d) of the Social Security Act, as

added by section 5001 of the CARES Act and as

amended by section 1001 of Division N of the

Consolidated Appropriations Act, 2021.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act does

not apply to a rulemaking when a

general notice of proposed rulemaking

is not required.

Paperwork Reduction Act

The final rule contains no

requirements subject to the Paperwork

Reduction Act.

Authority and Issuance

42 U.S.C. 1302(a).

Coronavirus Relief Fund Guidance for

State, Territorial, Local, and Tribal

Governments

The purpose of this document is to

provide guidance to recipients of the

funding available under section 601(a)

of the Social Security Act, as added by

section 5001 of the Coronavirus Aid,

Relief, and Economic Security Act

(‘‘CARES Act’’). The CARES Act

established the Coronavirus Relief Fund

(the ‘‘Fund’’) and appropriated $150

billion to the Fund. Under the CARES

Act, the Fund is to be used to make

payments for specified uses to States

and certain local governments; the

District of Columbia and U.S. Territories

(consisting of the Commonwealth of

Puerto Rico, the United States Virgin

Islands, Guam, American Samoa, and

the Commonwealth of the Northern

Mariana Islands); and Tribal

governments.

The CARES Act provides that

payments from the Fund may only be

used to cover costs that—

1. are necessary expenditures

incurred due to the public health

emergency with respect to the

Coronavirus Disease 2019 (COVID–19);

2. were not accounted for in the

budget most recently approved as of

March 27, 2020 (the date of enactment

of the CARES Act) for the State or

government; and

3. were incurred during the period

that begins on March 1, 2020, and ends

on December 31, 2021.

The guidance that follows sets forth

the Department of the Treasury’s

interpretation of these limitations on the

permissible use of Fund payments.

Necessary Expenditures Incurred Due to

the Public Health Emergency

The requirement that expenditures be

incurred ‘‘due to’’ the public health

emergency means that expenditures

must be used for actions taken to

respond to the public health emergency.

These may include expenditures

incurred to allow the State, territorial,

local, or Tribal government to respond

directly to the emergency, such as by

addressing medical or public health

needs, as well as expenditures incurred

to respond to second-order effects of the

emergency, such as by providing

economic support to those suffering

from employment or business

interruptions due to COVID–19-related

business closures. Funds may not be

used to fill shortfalls in government

revenue to cover expenditures that

would not otherwise qualify under the

statute. Although a broad range of uses

is allowed, revenue replacement is not

a permissible use of Fund payments.

The statute also specifies that

expenditures using Fund payments

must be ‘‘necessary.’’ The Department of

the Treasury understands this term

broadly to mean that the expenditure is

reasonably necessary for its intended

use in the reasonable judgment of the

government officials responsible for

spending Fund payments.

Costs Not Accounted for in the Budget

Most Recently Approved as of March 27,

2020

The CARES Act also requires that

payments be used only to cover costs

that were not accounted for in the

budget most recently approved as of

March 27, 2020. A cost meets this

requirement if either (a) the cost cannot

lawfully be funded using a line item,

allotment, or allocation within that

budget or (b) the cost is for a

substantially different use from any

expected use of funds in such a line

item, allotment, or allocation.

The ‘‘most recently approved’’ budget

refers to the enacted budget for the

relevant fiscal period for the particular

government, without taking into

account subsequent supplemental

appropriations enacted or other

budgetary adjustments made by that

government in response to the COVID–

19 public health emergency. A cost is

not considered to have been accounted

for in a budget merely because it could

be met using a budgetary stabilization

fund, rainy day fund, or similar reserve

account.

Costs Incurred During the Period That

Begins on March 1, 2020, and Ends on

December 31, 2021

Finally, the CARES Act provides that

payments from the Fund may only be

used to cover costs that were incurred

during the period that begins on March

1, 2020, and ends on December 31, 2021

(the ‘‘covered period’’). Putting this

requirement together with the other

provisions discussed above, section

601(d) may be summarized as providing

that a State, local, or tribal government

may use payments from the Fund only

to cover previously unbudgeted costs of

necessary expenditures incurred due to

the COVID–19 public health emergency

during the covered period.

Initial guidance released on April 22,

2020, provided that the cost of an

expenditure is incurred when the

recipient has expended funds to cover

the cost. Upon further consideration and

informed by an understanding of State,

local, and tribal government practices,

Treasury is clarifying that for a cost to

be considered to have been incurred,

performance or delivery must occur

during the covered period but payment

of funds need not be made during that

time (though it is generally expected

that this will take place within 90 days

of a cost being incurred). For instance,

in the case of a lease of equipment or

other property, irrespective of when

payment occurs, the cost of a lease

payment shall be considered to have

been incurred for the period of the lease

that is within the covered period but not

otherwise. Furthermore, in all cases it

must be necessary that performance or

delivery take place during the covered

period. Thus the cost of a good or

service received during the covered

period will not be considered eligible

under section 601(d) if there is no need

for receipt until after the covered period

has expired.

Goods delivered in the covered period

need not be used during the covered

period in all cases. For example, the

cost of a good that must be delivered in

December in order to be available for

use in January could be covered using

payments from the Fund. Additionally,

the cost of goods purchased in bulk and

delivered during the covered period

may be covered using payments from

the Fund if a portion of the goods is

ordered for use in the covered period,

the bulk purchase is consistent with the

recipient’s usual procurement policies

and practices, and it is impractical to

track and record when the items were

used. A recipient may use payments

from the Fund to purchase a durable

good that is to be used during the

current period and in subsequent

periods if the acquisition in the covered

period was necessary due to the public

health emergency.

Given that it is not always possible to

estimate with precision when a good or

service will be needed, the touchstone

in assessing the determination of need

for a good or service during the covered

period will be reasonableness at the

time delivery or performance was

sought, e.g., the time of entry into a

procurement contract specifying a time

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In addition, pursuant to section 5001(b) of

Division A of the CARES Act, payments from the

Fund are subject to the requirements contained in

the Further Appropriations Act of 2020 (Pub. L.

116–94) for funds for programs authorized under

section 330 through 340 of the Public Health

Service Act (42 U.S.C. 254 through 256). Section

5001(b) thereby applies to payments from the Fund

the general restrictions on the Department of Health

and Human Services’ appropriations. Of particular

relevance for the Fund, payments may not be

expended for an abortion, for health benefits

coverage—meaning a package of services covered

by a managed health care provider or organization

pursuant to a contract or other arrangement—that

includes coverage of abortion, for the creation of a

human embryo or embryos for research purposes,

or for research in which a human embryo is

destroyed, discarded, or knowingly subjected to risk

of injury or death greater than that allowed for

research on fetuses in utero under 45 CFR 46.204(b)

and 42 U.S.C. 289g(b)). The prohibition on payment

for abortions and health benefits coverage that

includes coverage of abortion does not apply to an

abortion if the pregnancy is the result of an act of

rape or incest; or in the case where a woman suffers

from a physical disorder, physical injury, or

physical illness, including a life-endangering

physical condition caused by or arising from the

pregnancy itself, that would, as certified by a

physician, place the woman in danger of death

unless an abortion is performed. These provisions

do not prohibit the expenditure by a State, locality,

entity, or private person of State, local, or private

funds (other than a State’s or locality’s contribution

of Medicaid matching funds). These provisions do

not restrict the ability of a managed care provider

from offering abortion coverage or the ability of a

State or locality to contract separately with such a

provider for such coverage with State funds (other

than a State’s or locality’s contribution of Medicaid

matching funds). Furthermore, no government

which receives payments from the Fund may

discriminate against a health care entity on the

basis that the entity does not provide, pay for,

provide coverage of, or refer for abortions. Except

with respect to certain law enforcement and

adjudication activities, no funds may be used to

maintain or establish a computer network unless

such network blocks the viewing, downloading, and

exchanging of pornography. No payments from the

Fund may be provided to the Association of

Community Organizations for Reform Now

(ACORN) or any of its affiliates, subsidiaries, allied

organizations, or successors. For the full text of

these requirements, see Title V of Pubic Law 116–

94 (133 Stat. 2605 et seq.), available at https://

www.congress.gov/116/plaws/publ94/PLAW-

116publ94.pdf.

See 42 CFR 433.51 and 45 CFR 75.306.

for delivery. Similarly, in recognition of

the likelihood of supply chain

disruptions and increased demand for

certain goods and services during the

COVID–19 public health emergency, if a

recipient enters into a contract requiring

the delivery of goods or performance of

services by December 31, 2021, the

failure of a vendor to complete delivery

or services by December 31, 2021, will

not affect the ability of the recipient to

use payments from the Fund to cover

the cost of such goods or services if the

delay is due to circumstances beyond

the recipient’s control.

This guidance applies in a like

manner to costs of subrecipients. Thus,

a grant or loan, for example, provided

by a recipient using payments from the

Fund must be used by the subrecipient

only to purchase (or reimburse a

purchase of) goods or services for which

receipt both is needed within the

covered period and occurs within the

covered period. The direct recipient of

payments from the Fund is ultimately

responsible for compliance with this

limitation on use of payments from the

Fund.

Nonexclusive Examples of Eligible

Expenditures

Eligible expenditures include, but are

not limited to, payment for:

1. Medical expenses such as:

• COVID–19-related expenses of

public hospitals, clinics, and similar

facilities.

• Expenses of establishing temporary

public medical facilities and other

measures to increase COVID–19

treatment capacity, including related

construction costs.

• Costs of providing COVID–19

testing, including serological testing.

• Emergency medical response

expenses, including emergency medical

transportation, related to COVID–19.

• Expenses for establishing and

operating public telemedicine

capabilities for COVID–19-related

treatment.

2. Public health expenses such as:

• Expenses for communication and

enforcement by State, territorial, local,

and Tribal governments of public health

orders related to COVID–19.

• Expenses for acquisition and

distribution of medical and protective

supplies, including sanitizing products

and personal protective equipment, for

medical personnel, police officers,

social workers, child protection

services, and child welfare officers,

direct service providers for older adults

and individuals with disabilities in

community settings, and other public

health or safety workers in connection

with the COVID–19 public health

emergency.

• Expenses for disinfection of public

areas and other facilities, e.g., nursing

homes, in response to the COVID–19

public health emergency.

• Expenses for technical assistance to

local authorities or other entities on

mitigation of COVID–19-related threats

to public health and safety.

• Expenses for public safety measures

undertaken in response to COVID–19.

• Expenses for quarantining

individuals.

3. Payroll expenses for public safety,

public health, health care, human

services, and similar employees whose

services are substantially dedicated to

mitigating or responding to the COVID–

19 public health emergency.

4. Expenses of actions to facilitate

compliance with COVID–19-related

public health measures, such as:

• Expenses for food delivery to

residents, including, for example, senior

citizens and other vulnerable

populations, to enable compliance with

COVID–19 public health precautions.

• Expenses to facilitate distance

learning, including technological

improvements, in connection with

school closings to enable compliance

with COVID–19 precautions.

• Expenses to improve telework

capabilities for public employees to

enable compliance with COVID–19

public health precautions.

• Expenses of providing paid sick and

paid family and medical leave to public

employees to enable compliance with

COVID–19 public health precautions.

• COVID–19-related expenses of

maintaining state prisons and county

jails, including as relates to sanitation

and improvement of social distancing

measures, to enable compliance with

COVID–19 public health precautions.

• Expenses for care for homeless

populations provided to mitigate

COVID–19 effects and enable

compliance with COVID–19 public

health precautions.

5. Expenses associated with the

provision of economic support in

connection with the COVID–19 public

health emergency, such as:

• Expenditures related to the

provision of grants to small businesses

to reimburse the costs of business

interruption caused by required

closures.

• Expenditures related to a State,

territorial, local, or Tribal government

payroll support program.

• Unemployment insurance costs

related to the COVID–19 public health

emergency if such costs will not be

reimbursed by the federal government

pursuant to the CARES Act or

otherwise.

6. Any other COVID–19-related

expenses reasonably necessary to the

function of government that satisfy the

Fund’s eligibility criteria.

Nonexclusive Examples of Ineligible

Expenditures

The following is a list of examples of

costs that would not be eligible

expenditures of payments from the

Fund.

1. Expenses for the State share of

Medicaid.

2. Damages covered by insurance.

3. Payroll or benefits expenses for

employees whose work duties are not

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency.

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4. Expenses that have been or will be

reimbursed under any federal program,

such as the reimbursement by the

federal government pursuant to the

CARES Act of contributions by States to

State unemployment funds.

5. Reimbursement to donors for

donated items or services.

6. Workforce bonuses other than

hazard pay or overtime.

7. Severance pay.

8. Legal settlements.

Supplemental Guidance on Use of

Funds To Cover Payroll and Benefits of

Public Employees

As discussed in the Guidance above,

the CARES Act provides that payments

from the Fund must be used only to

cover costs that were not accounted for

in the budget most recently approved as

of March 27, 2020. As reflected in the

Guidance and FAQs, Treasury has not

interpreted this provision to limit

eligible costs to those that are

incremental increases above amounts

previously budgeted. Rather, Treasury

has interpreted this provision to exclude

items that were already covered for their

original use (or a substantially similar

use). This guidance reflects the intent

behind the Fund, which was not to

provide general fiscal assistance to state

governments but rather to assist them

with COVID–19-related necessary

expenditures. With respect to personnel

expenses, though the Fund was not

intended to be used to cover

government payroll expenses generally,

the Fund was intended to provide

assistance to address increased

expenses, such as the expense of hiring

new personnel as needed to assist with

the government’s response to the public

health emergency and to allow

recipients facing budget pressures not to

have to lay off or furlough employees

who would be needed to assist with that

purpose.

Substantially Different Use

As stated in the Guidance above,

Treasury considers the requirement that

payments from the Fund be used only

to cover costs that were not accounted

for in the budget most recently

approved as of March 27, 2020, to be

met if either (a) the cost cannot lawfully

be funded using a line item, allotment,

or allocation within that budget or (b)

the cost is for a substantially different

use from any expected use of funds in

such a line item, allotment, or

allocation.

Treasury has provided examples as to

what would constitute a substantially

different use. Treasury provided (in

FAQ A.3) that costs incurred for a

substantially different use would

include, for example, the costs of

redeploying educational support staff or

faculty to develop online learning

capabilities, such as through providing

information technology support that is

not part of the staff or faculty’s ordinary

responsibilities.

Substantially Dedicated

Within this category of substantially

different uses, as stated in the Guidance

above, Treasury has included payroll

and benefits expenses for public safety,

public health, health care, human

services, and similar employees whose

services are substantially dedicated to

mitigating or responding to the COVID–

19 public health emergency. The full

amount of payroll and benefits expenses

of substantially dedicated employees

may be covered using payments from

the Fund. Treasury has not developed a

precise definition of what ‘‘substantially

dedicated’’ means given that there is not

a precise way to define this term across

different employment types. The

relevant unit of government should

maintain documentation of the

‘‘substantially dedicated’’ conclusion

with respect to its employees.

If an employee is not substantially

dedicated to mitigating or responding to

the COVID–19 public health emergency,

his or her payroll and benefits expenses

may not be covered in full with

payments from the Fund. A portion of

such expenses may be able to be

covered, however, as discussed below.

Public Health and Public Safety

In recognition of the particular

importance of public health and public

safety workers to State, local, and tribal

government responses to the public

health emergency, Treasury has

provided, as an administrative

accommodation, that a State, local, or

tribal government may presume that

public health and public safety

employees meet the substantially

dedicated test, unless the chief

executive (or equivalent) of the relevant

government determines that specific

circumstances indicate otherwise. This

means that, if this presumption applies,

work performed by such employees is

considered to be a substantially

different use than accounted for in the

most recently approved budget as of

March 27, 2020. All costs of such

employees may be covered using

payments from the Fund for services

provided during the period that begins

on March 1, 2020, and ends on

December 31, 2021.

In response to questions regarding

which employees are within the scope

of this accommodation, Treasury is

supplementing this guidance to clarify

that public safety employees would

include police officers (including state

police officers), sheriffs and deputy

sheriffs, firefighters, emergency medical

responders, correctional and detention

officers, and those who directly support

such employees such as dispatchers and

supervisory personnel. Public health

employees would include employees

involved in providing medical and other

health services to patients and

supervisory personnel, including

medical staff assigned to schools,

prisons, and other such institutions, and

other support services essential for

patient care (e.g., laboratory technicians)

as well as employees of public health

departments directly engaged in matters

related to public health and related

supervisory personnel.

Not Substantially Dedicated

As provided in FAQ A.47, a State,

local, or tribal government may also

track time spent by employees related to

COVID–19 and apply Fund payments on

that basis but would need to do so

consistently within the relevant agency

or department. This means, for example,

that a government could cover payroll

expenses allocated on an hourly basis to

employees’ time dedicated to mitigating

or responding to the COVID–19 public

health emergency. This result provides

equitable treatment to governments that,

for example, instead of having a few

employees who are substantially

dedicated to the public health

emergency, have many employees who

have a minority of their time dedicated

to the public health emergency.

Covered Benefits

Payroll and benefits of a substantially

dedicated employee may be covered

using payments from the Fund to the

extent incurred between March 1 and

December 31, 2021.

Payroll includes certain hazard pay

and overtime, but not workforce

bonuses. As discussed in FAQ A.29,

hazard pay may be covered using

payments from the Fund if it is

provided for performing hazardous duty

or work involving physical hardship

that in each case is related to COVID–

19. This means that, whereas payroll

and benefits of an employee who is

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency may generally be

covered in full using payments from the

Fund, hazard pay specifically may only

be covered to the extent it is related to

COVID–19. For example, a recipient

may use payments from the Fund to

cover hazard pay for a police officer

coming in close contact with members

of the public to enforce public health or

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public safety orders, but across-the-

board hazard pay for all members of a

police department regardless of their

duties would not be able to be covered

with payments from the Fund. This

position reflects the statutory intent

discussed above: the Fund was intended

to be used to help governments address

the public health emergency both by

providing funds for incremental

expenses (such as hazard pay related to

COVID–19) and to allow governments

not to have to furlough or lay off

employees needed to address the public

health emergency but was not intended

to provide across-the-board budget

support (as would be the case if hazard

pay regardless of its relation to COVID–

19 or workforce bonuses were permitted

to be covered using payments from the

Fund).

Relatedly, both hazard pay and

overtime pay for employees that are not

substantially dedicated may only be

covered using the Fund if the hazard

pay and overtime pay is for COVID–19-

related duties. As discussed above,

governments may allocate payroll and

benefits of such employees with respect

to time worked on COVID–19-related

matters.

Covered benefits include, but are not

limited to, the costs of all types of leave

(vacation, family-related, sick, military,

bereavement, sabbatical, jury duty),

employee insurance (health, life, dental,

vision), retirement (pensions, 401(k)),

unemployment benefit plans (federal

and state), workers compensation

insurance, and Federal Insurance

Contributions Act (FICA) taxes (which

includes Social Security and Medicare

taxes).

Supplemental Guidance on Use of

Funds To Cover Administrative Costs

General

Payments from the Fund are not

administered as part of a traditional

grant program and the provisions of the

Uniform Guidance, 2 CFR part 200, that

are applicable to indirect costs do not

apply. Recipients may not apply their

indirect costs rates to payments received

from the Fund.

Recipients may, if they meet the

conditions specified in the guidance for

tracking time consistently across a

department, use payments from the

Fund to cover the portion of payroll and

benefits of employees corresponding to

time spent on administrative work

necessary due to the COVID–19 public

health emergency. (In other words, such

costs would be eligible direct costs of

the recipient). This includes, but is not

limited to, costs related to disbursing

payments from the Fund and managing

new grant programs established using

payments from the Fund.

As with any other costs to be covered

using payments from the Fund, any

such administrative costs must be

incurred by December 31, 2021, with an

exception for certain compliance costs

as discussed below. Furthermore, as

discussed in the Guidance above, as

with any other cost, an administrative

cost that has been or will be reimbursed

under any federal program may not be

covered with the Fund. For example, if

an administrative cost is already being

covered as a direct or indirect cost

pursuant to another federal grant, the

Fund may not be used to cover that cost.

Compliance Costs Related to the Fund

As previously stated in FAQ B.11,

recipients are permitted to use

payments from the Fund to cover the

expenses of an audit conducted under

the Single Audit Act, subject to the

limitations set forth in 2 CFR 200.425.

Pursuant to that provision of the

Uniform Guidance, recipients and

subrecipients subject to the Single Audit

Act may use payments from the Fund to

cover a reasonably proportionate share

of the costs of audits attributable to the

Fund.

To the extent a cost is incurred by

December 31, 2021, for an eligible use

consistent with section 601 of the Social

Security Act and Treasury’s guidance, a

necessary administrative compliance

expense that relates to such underlying

cost may be incurred after December 31,

2021. Such an expense would include,

for example, expenses incurred to

comply with the Single Audit Act and

reporting and recordkeeping

requirements imposed by the Office of

Inspector General. A recipient with such

necessary administrative expenses, such

as an ongoing audit continuing past

December 31, 2021, that relates to Fund

expenditures incurred during the

covered period, must report to the

Treasury Office of Inspector General by

the quarter ending September 2022 an

estimate of the amount of such

necessary administrative expenses.

Instructions for State, Territorial,

Local, and Tribal Governments To

Return Unused Coronavirus Relief

Fund Payments to the Department of

the Treasury

Any remaining amount of payments

from the Fund not used for eligible

expenses incurred during the covered

period must be returned to Treasury in

one of three ways, set forth below.

Please note that these instructions are

for Fund recipients to return the balance

of unused Fund payments to Treasury.

If the Treasury Office of Inspector

General determines that a Fund

recipient has failed to comply with the

use restrictions set forth in section

601(d) of the Social Security Act, the

Fund recipient should follow the

instructions provided by the Treasury

Office of Inspector General for

satisfaction of the related debt rather

than following these instructions.

1. Fedwire receipts—Treasury can

accept Fedwire payments for the return

of funds to Treasury.

Please provide the following

instructions to your Financial

Institution for the remittance of Fedwire

payments to the Department of the

Treasury.

EDWIRE

NSTRUCTIONS

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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EDWIRE

NSTRUCTIONS

—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

ACH payment for the return of funds to

Treasury.

Please provide the following

instructions to your Financial

Institution for the remittance of

Automated Clearing House (ACH)

credits to the Department of the

Treasury.

ACH C

REDIT

NSTRUCTIONS

NACHA

record type

code

NACHA

field

NACHA

data element name

Required information

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)—

Checks may be sent to one of the

following addresses (depending on the

method of delivery).

U.S. M

AIL

ARCEL

ELIVERY

DDRESS

U.S. Mail address—

processing

Parcel delivery ad-

dress—processing

Fiscal Accounting

Program, Admin &

Training Group.

Fiscal Accounting

Program, Admin &

Training Group.

Avery Street A3–G,

Bureau of the Fis-

cal Service, P.O.

Box 1328, Parkers-

burg, WV 26106–

1328.

Avery Street A3–G,

Fiscal Service

Warehouse & Op-

erations Center

Dock 1, 257 Bosley

Industrial Park

Drive, Parkersburg

WV 26106.

Frequently Asked Questions

The following answers to frequently

asked questions supplement Treasury’s

Coronavirus Relief Fund Guidance for

State, Territorial, Local, and Tribal

Governments.

A. Eligible Expenditures

1. Are governments required to submit

proposed expenditures to Treasury for

approval?

No. Governments are responsible for

making determinations as to what

expenditures are necessary due to the

public health emergency with respect to

COVID–19 and do not need to submit

any proposed expenditures to Treasury.

2. The Guidance says that funding can

be used to meet payroll expenses for

public safety, public health, health care,

human services, and similar employees

whose services are substantially

dedicated to mitigating or responding to

the COVID–19 public health emergency.

How does a government determine

whether payroll expenses for a given

employee satisfy the ‘‘substantially

dedicated’’ condition?

The Fund is designed to provide

ready funding to address unforeseen

financial needs and risks created by the

COVID–19 public health emergency. For

this reason, and as a matter of

administrative convenience in light of

the emergency nature of this program, a

State, territorial, local, or Tribal

government may presume that payroll

costs for public health and public safety

employees are payments for services

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency, unless the chief

executive (or equivalent) of the relevant

government determines that specific

circumstances indicate otherwise.

3. The Guidance says that a cost was not

accounted for in the most recently

approved budget if the cost is for a

substantially different use from any

expected use of funds in such a line

item, allotment, or allocation. What

would qualify as a ‘‘substantially

different use’’ for purposes of the Fund

eligibility?

Costs incurred for a ‘‘substantially

different use’’ include, but are not

necessarily limited to, costs of

personnel and services that were

budgeted for in the most recently

approved budget but which, due

entirely to the COVID–19 public health

emergency, have been diverted to

substantially different functions. This

would include, for example, the costs of

redeploying corrections facility staff to

enable compliance with COVID–19

public health precautions through work

such as enhanced sanitation or

enforcing social distancing measures;

the costs of redeploying police to

support management and enforcement

of stay-at-home orders; or the costs of

diverting educational support staff or

faculty to develop online learning

capabilities, such as through providing

information technology support that is

not part of the staff or faculty’s ordinary

responsibilities.

Note that a public function does not

become a ‘‘substantially different use’’

merely because it is provided from a

different location or through a different

manner. For example, although

developing online instruction

capabilities may be a substantially

different use of funds, online instruction

itself is not a substantially different use

of public funds than classroom

instruction.

4. May a State receiving a payment

transfer funds to a local government?

Yes, provided that the transfer

qualifies as a necessary expenditure

incurred due to the public health

emergency and meets the other criteria

of section 601(d) of the Social Security

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Act. Such funds would be subject to

recoupment by the Treasury Department

if they have not been used in a manner

consistent with section 601(d) of the

Social Security Act.

5. May a unit of local government

receiving a Fund payment transfer funds

to another unit of government?

Yes. For example, a county may

transfer funds to a city, town, or school

district within the county and a county

or city may transfer funds to its State,

provided that the transfer qualifies as a

necessary expenditure incurred due to

the public health emergency and meets

the other criteria of section 601(d) of the

Social Security Act outlined in the

Guidance. For example, a transfer from

a county to a constituent city would not

be permissible if the funds were

intended to be used simply to fill

shortfalls in government revenue to

cover expenditures that would not

otherwise qualify as an eligible

expenditure.

6. Is a Fund payment recipient required

to transfer funds to a smaller,

constituent unit of government within

its borders?

No. For example, a county recipient is

not required to transfer funds to smaller

cities within the county’s borders.

7. Are recipients required to use other

federal funds or seek reimbursement

under other federal programs before

using Fund payments to satisfy eligible

expenses?

No. Recipients may use Fund

payments for any expenses eligible

under section 601(d) of the Social

Security Act outlined in the Guidance.

Fund payments are not required to be

used as the source of funding of last

resort. However, as noted below,

recipients may not use payments from

the Fund to cover expenditures for

which they will receive reimbursement.

8. Are there prohibitions on combining

a transaction supported with Fund

payments with other CARES Act

funding or COVID–19 relief Federal

funding?

Recipients will need to consider the

applicable restrictions and limitations of

such other sources of funding. In

addition, expenses that have been or

will be reimbursed under any federal

program, such as the reimbursement by

the federal government pursuant to the

CARES Act of contributions by States to

State unemployment funds, are not

eligible uses of Fund payments.

9. Are States permitted to use Fund

payments to support state

unemployment insurance funds

generally?

To the extent that the costs incurred

by a state unemployment insurance

fund are incurred due to the COVID–19

public health emergency, a State may

use Fund payments to make payments

to its respective state unemployment

insurance fund, separate and apart from

such State’s obligation to the

unemployment insurance fund as an

employer. This will permit States to use

Fund payments to prevent expenses

related to the public health emergency

from causing their state unemployment

insurance funds to become insolvent.

10. Are recipients permitted to use Fund

payments to pay for unemployment

insurance costs incurred by the

recipient as an employer?

Yes, Fund payments may be used for

unemployment insurance costs incurred

by the recipient as an employer (for

example, as a reimbursing employer)

related to the COVID–19 public health

emergency if such costs will not be

reimbursed by the federal government

pursuant to the CARES Act or

otherwise.

11. The Guidance states that the Fund

may support a ‘‘broad range of uses’’

including payroll expenses for several

classes of employees whose services are

‘‘substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency.’’ What are some

examples of types of covered

employees?

The Guidance provides examples of

broad classes of employees whose

payroll expenses would be eligible

expenses under the Fund. These classes

of employees include public safety,

public health, health care, human

services, and similar employees whose

services are substantially dedicated to

mitigating or responding to the COVID–

19 public health emergency. Payroll and

benefit costs associated with public

employees who could have been

furloughed or otherwise laid off but who

were instead repurposed to perform

previously unbudgeted functions

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency are also covered.

Other eligible expenditures include

payroll and benefit costs of educational

support staff or faculty responsible for

developing online learning capabilities

necessary to continue educational

instruction in response to COVID–19-

related school closures. Please see the

Guidance for a discussion of what is

meant by an expense that was not

accounted for in the budget most

recently approved as of March 27, 2020.

12. In some cases, first responders and

critical health care workers that contract

COVID–19 are eligible for workers’

compensation coverage. Is the cost of

this expanded workers compensation

coverage eligible?

Increased workers compensation cost

to the government due to the COVID–19

public health emergency incurred

during the period beginning March 1,

2020, and ending December 31, 2021, is

an eligible expense.

13. If a recipient would have

decommissioned equipment or not

renewed a lease on particular office

space or equipment but decides to

continue to use the equipment or to

renew the lease in order to respond to

the public health emergency, are the

costs associated with continuing to

operate the equipment or the ongoing

lease payments eligible expenses?

Yes. To the extent the expenses were

previously unbudgeted and are

otherwise consistent with section 601(d)

of the Social Security Act outlined in

the Guidance, such expenses would be

eligible.

14. May recipients provide stipends to

employees for eligible expenses (for

example, a stipend to employees to

improve telework capabilities) rather

than require employees to incur the

eligible cost and submit for

reimbursement?

Expenditures paid for with payments

from the Fund must be limited to those

that are necessary due to the public

health emergency. As such, unless the

government were to determine that

providing assistance in the form of a

stipend is an administrative necessity,

the government should provide such

assistance on a reimbursement basis to

ensure as much as possible that funds

are used to cover only eligible expenses.

15. May Fund payments be used for

COVID–19 public health emergency

recovery planning?

Yes. Expenses associated with

conducting a recovery planning project

or operating a recovery coordination

office would be eligible, if the expenses

otherwise meet the criteria set forth in

section 601(d) of the Social Security Act

outlined in the Guidance.

16. Are expenses associated with

contact tracing eligible?

Yes, expenses associated with contact

tracing are eligible.

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17. To what extent may a government

use Fund payments to support the

operations of private hospitals?

Governments may use Fund payments

to support public or private hospitals to

the extent that the costs are necessary

expenditures incurred due to the

COVID–19 public health emergency, but

the form such assistance would take

may differ. In particular, financial

assistance to private hospitals could

take the form of a grant or a short-term

loan.

18. May payments from the Fund be

used to assist individuals with enrolling

in a government benefit program for

those who have been laid off due to

COVID–19 and thereby lost health

insurance?

Yes. To the extent that the relevant

government official determines that

these expenses are necessary and they

meet the other requirements set forth in

section 601(d) of the Social Security Act

outlined in the Guidance, these

expenses are eligible.

19. May recipients use Fund payments

to facilitate livestock depopulation

incurred by producers due to supply

chain disruptions?

Yes, to the extent these efforts are

deemed necessary for public health

reasons or as a form of economic

support as a result of the COVID–19

health emergency.

20. Would providing a consumer grant

program to prevent eviction and assist

in preventing homelessness be

considered an eligible expense?

Yes, assuming that the recipient

considers the grants to be a necessary

expense incurred due to the COVID–19

public health emergency and the grants

meet the other requirements for the use

of Fund payments under section 601(d)

of the Social Security Act outlined in

the Guidance. As a general matter,

providing assistance to recipients to

enable them to meet property tax

requirements would not be an eligible

use of funds, but exceptions may be

made in the case of assistance designed

to prevent foreclosures.

21. May recipients create a ‘‘payroll

support program’’ for public employees?

Use of payments from the Fund to

cover payroll or benefits expenses of

public employees are limited to those

employees whose work duties are

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency.

22. May recipients use Fund payments

to cover employment and training

programs for employees that have been

furloughed due to the public health

emergency?

Yes, this would be an eligible expense

if the government determined that the

costs of such employment and training

programs would be necessary due to the

public health emergency.

23. May recipients use Fund payments

to provide emergency financial

assistance to individuals and families

directly impacted by a loss of income

due to the COVID–19 public health

emergency?

Yes, if a government determines such

assistance to be a necessary

expenditure. Such assistance could

include, for example, a program to assist

individuals with payment of overdue

rent or mortgage payments to avoid

eviction or foreclosure or unforeseen

financial costs for funerals and other

emergency individual needs. Such

assistance should be structured in a

manner to ensure as much as possible,

within the realm of what is

administratively feasible, that such

assistance is necessary.

24. The Guidance provides that eligible

expenditures may include expenditures

related to the provision of grants to

small businesses to reimburse the costs

of business interruption caused by

required closures. What is meant by a

‘‘small business,’’ and is the Guidance

intended to refer only to expenditures to

cover administrative expenses of such a

grant program?

Governments have discretion to

determine what payments are necessary.

A program that is aimed at assisting

small businesses with the costs of

business interruption caused by

required closures should be tailored to

assist those businesses in need of such

assistance. The amount of a grant to a

small business to reimburse the costs of

business interruption caused by

required closures would also be an

eligible expenditure under section

601(d) of the Social Security Act, as

outlined in the Guidance.

25. The Guidance provides that

expenses associated with the provision

of economic support in connection with

the public health emergency, such as

expenditures related to the provision of

grants to small businesses to reimburse

the costs of business interruption

caused by required closures, would

constitute eligible expenditures of Fund

payments. Would such expenditures be

eligible in the absence of a stay-at-home

order?

Fund payments may be used for

economic support in the absence of a

stay-at-home order if such expenditures

are determined by the government to be

necessary. This may include, for

example, a grant program to benefit

small businesses that close voluntarily

to promote social distancing measures

or that are affected by decreased

customer demand as a result of the

COVID–19 public health emergency.

26. May Fund payments be used to

assist impacted property owners with

the payment of their property taxes?

Fund payments may not be used for

government revenue replacement,

including the provision of assistance to

meet tax obligations.

27. May Fund payments be used to

replace foregone utility fees? If not, can

Fund payments be used as a direct

subsidy payment to all utility account

holders?

Fund payments may not be used for

government revenue replacement,

including the replacement of unpaid

utility fees. Fund payments may be used

for subsidy payments to electricity

account holders to the extent that the

subsidy payments are deemed by the

recipient to be necessary expenditures

incurred due to the COVID–19 public

health emergency and meet the other

criteria of section 601(d) of the Social

Security Act outlined in the Guidance.

For example, if determined to be a

necessary expenditure, a government

could provide grants to individuals

facing economic hardship to allow them

to pay their utility fees and thereby

continue to receive essential services.

28. Could Fund payments be used for

capital improvement projects that

broadly provide potential economic

development in a community?

In general, no. If capital improvement

projects are not necessary expenditures

incurred due to the COVID–19 public

health emergency, then Fund payments

may not be used for such projects.

However, Fund payments may be

used for the expenses of, for example,

establishing temporary public medical

facilities and other measures to increase

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COVID–19 treatment capacity or

improve mitigation measures, including

related construction costs.

29. The Guidance includes workforce

bonuses as an example of ineligible

expenses but provides that hazard pay

would be eligible if otherwise

determined to be a necessary expense. Is

there a specific definition of ‘‘hazard

pay’’?

Hazard pay means additional pay for

performing hazardous duty or work

involving physical hardship, in each

case that is related to COVID–19.

30. The Guidance provides that

ineligible expenditures include

‘‘[p]ayroll or benefits expenses for

employees whose work duties are not

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency.’’ Is this intended to

relate only to public employees?

Yes. This particular nonexclusive

example of an ineligible expenditure

relates to public employees. A recipient

would not be permitted to pay for

payroll or benefit expenses of private

employees and any financial assistance

(such as grants or short-term loans) to

private employers are not subject to the

restriction that the private employers’

employees must be substantially

dedicated to mitigating or responding to

the COVID–19 public health emergency.

31. May counties pre-pay with CARES

Act funds for expenses such as a one or

two-year facility lease, such as to house

staff hired in response to COVID–19?

A government should not make

prepayments on contracts using

payments from the Fund to the extent

that doing so would not be consistent

with its ordinary course policies and

procedures.

32. Must a stay-at-home order or other

public health mandate be in effect in

order for a government to provide

assistance to small businesses using

payments from the Fund?

No. The Guidance provides, as an

example of an eligible use of payments

from the Fund, expenditures related to

the provision of grants to small

businesses to reimburse the costs of

business interruption caused by

required closures. Such assistance may

be provided using amounts received

from the Fund in the absence of a

requirement to close businesses if the

relevant government determines that

such expenditures are necessary in

response to the public health

emergency.

33. Should States receiving a payment

transfer funds to local governments that

did not receive payments directly from

Treasury?

Yes, provided that the transferred

funds are used by the local government

for eligible expenditures under the

statute. To facilitate prompt distribution

of Title V funds, the CARES Act

authorized Treasury to make direct

payments to local governments with

populations in excess of 500,000, in

amounts equal to 45% of the local

government’s per capita share of the

statewide allocation. This statutory

structure was based on a recognition

that it is more administratively feasible

to rely on States, rather than the federal

government, to manage the transfer of

funds to smaller local governments.

Consistent with the needs of all local

governments for funding to address the

public health emergency, States should

transfer funds to local governments with

populations of 500,000 or less, using as

a benchmark the per capita allocation

formula that governs payments to larger

local governments. This approach will

ensure equitable treatment among local

governments of all sizes.

For example, a State received the

minimum $1.25 billion allocation and

had one county with a population over

500,000 that received $250 million

directly. The State should distribute 45

percent of the $1 billion it received, or

$450 million, to local governments

within the State with a population of

500,000 or less.

34. May a State impose restrictions on

transfers of funds to local governments?

Yes, to the extent that the restrictions

facilitate the State’s compliance with

the requirements set forth in section

601(d) of the Social Security Act

outlined in the Guidance and other

applicable requirements such as the

Single Audit Act, discussed below.

Other restrictions, such as restrictions

on reopening that do not directly

concern the use of funds, are not

permissible.

35. If a recipient must issue tax

anticipation notes (TANs) to make up

for tax due date deferrals or revenue

shortfalls, are the expenses associated

with the issuance eligible uses of Fund

payments?

If a government determines that the

issuance of TANs is necessary due to

the COVID–19 public health emergency,

the government may expend payments

from the Fund on the interest expense

payable on TANs by the borrower and

unbudgeted administrative and

transactional costs, such as necessary

payments to advisors and underwriters,

associated with the issuance of the

TANs.

36. May recipients use Fund payments

to expand rural broadband capacity to

assist with distance learning and

telework?

Such expenditures would only be

permissible if they are necessary for the

public health emergency. The cost of

projects that would not be expected to

increase capacity to a significant extent

until the need for distance learning and

telework have passed due to this public

health emergency would not be

necessary due to the public health

emergency and thus would not be

eligible uses of Fund payments.

37. Are costs associated with increased

solid waste capacity an eligible use of

payments from the Fund?

Yes, costs to address increase in solid

waste as a result of the public health

emergency, such as relates to the

disposal of used personal protective

equipment, would be an eligible

expenditure.

38. May payments from the Fund be

used to cover across-the-board hazard

pay for employees working during a

state of emergency?

No. Hazard pay means additional pay

for performing hazardous duty or work

involving physical hardship, in each

case that is related to COVID–19.

Payments from the fund may only be

used to cover such hazard pay.

39. May Fund payments be used for

expenditures related to the

administration of Fund payments by a

State, territorial, local, or Tribal

government?

Yes, if the administrative expenses

represent an increase over previously

budgeted amounts and are limited to

what is necessary. For example, a State

may expend Fund payments on

necessary administrative expenses

incurred with respect to a new grant

program established to disburse

amounts received from the Fund.

40. May recipients use Fund payments

to provide loans?

Yes, if the loans otherwise qualify as

eligible expenditures under section

601(d) of the Social Security Act as

implemented by the Guidance. Any

amounts repaid by the borrower before

December 31, 2021, must be either

returned to Treasury upon receipt by the

unit of government providing the loan

or used for another expense that

qualifies as an eligible expenditure

under section 601(d) of the Social

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Security Act. Any amounts not repaid

by the borrower until after December 31,

2021, must be returned to Treasury

upon receipt by the unit of government

lending the funds.

41. May Fund payments be used for

expenditures necessary to prepare for a

future COVID–19 outbreak?

Fund payments may be used only for

expenditures necessary to address the

current COVID–19 public health

emergency. For example, a State may

spend Fund payments to create a

reserve of personal protective

equipment or develop increased

intensive care unit capacity to support

regions in its jurisdiction not yet

affected, but likely to be impacted by

the current COVID–19 pandemic.

42. May funds be used to satisfy non-

federal matching requirements under

the Stafford Act?

Yes, payments from the Fund may be

used to meet the non-federal matching

requirements for Stafford Act assistance,

including FEMA’s Emergency

Management Performance Grant (EMPG)

and EMPG Supplemental programs, to

the extent such matching requirements

entail COVID–19-related costs that

otherwise satisfy the Fund’s eligibility

criteria and the Stafford Act. Regardless

of the use of Fund payments for such

purposes, FEMA funding is still

dependent on FEMA’s determination of

eligibility under the Stafford Act.

43. Must a State, local, or tribal

government require applications to be

submitted by businesses or individuals

before providing assistance using

payments from the Fund?

Governments have discretion to

determine how to tailor assistance

programs they establish in response to

the COVID–19 public health emergency.

However, such a program should be

structured in such a manner as will

ensure that such assistance is

determined to be necessary in response

to the COVID–19 public health

emergency and otherwise satisfies the

requirements of the CARES Act and

other applicable law. For example, a per

capita payment to residents of a

particular jurisdiction without an

assessment of individual need would

not be an appropriate use of payments

from the Fund.

44. May Fund payments be provided to

non-profits for distribution to

individuals in need of financial

assistance, such as rent relief?

Yes, non-profits may be used to

distribute assistance. Regardless of how

the assistance is structured, the

financial assistance provided would

have to be related to COVID–19.

45. May recipients use Fund payments

to remarket the recipient’s convention

facilities and tourism industry?

Yes, if the costs of such remarketing

satisfy the requirements of the CARES

Act. Expenses incurred to publicize the

resumption of activities and steps taken

to ensure a safe experience may be

needed due to the public health

emergency. Expenses related to

developing a long-term plan to

reposition a recipient’s convention and

tourism industry and infrastructure

would not be incurred due to the public

health emergency and therefore may not

be covered using payments from the

Fund.

46. May a State provide assistance to

farmers and meat processors to expand

capacity, such to cover overtime for

USDA meat inspectors?

If a State determines that expanding

meat processing capacity, including by

paying overtime to USDA meat

inspectors, is a necessary expense

incurred due to the public health

emergency, such as if increased capacity

is necessary to allow farmers and

processors to donate meat to food banks,

then such expenses are eligible

expenses, provided that the expenses

satisfy the other requirements set forth

in section 601(d) of the Social Security

Act outlined in the Guidance.

47. The guidance provides that funding

may be used to meet payroll expenses

for public safety, public health, health

care, human services, and similar

employees whose services are

substantially dedicated to mitigating or

responding to the COVID–19 public

health emergency. May Fund payments

be used to cover such an employee’s

entire payroll cost or just the portion of

time spent on mitigating or responding

to the COVID–19 public health

emergency?

As a matter of administrative

convenience, the entire payroll cost of

an employee whose time is substantially

dedicated to mitigating or responding to

the COVID–19 public health emergency

is eligible, provided that such payroll

costs are incurred by December 31,

2021. An employer may also track time

spent by employees related to COVID–

19 and apply Fund payments on that

basis but would need to do so

consistently within the relevant agency

or department.

48. May Fund payments be used to

cover increased administrative leave

costs of public employees who could

not telework in the event of a stay at

home order or a case of COVID–19 in

the workplace?

The statute requires that payments be

used only to cover costs that were not

accounted for in the budget most

recently approved as of March 27, 2020.

As stated in the Guidance, a cost meets

this requirement if either (a) the cost

cannot lawfully be funded using a line

item, allotment, or allocation within

that budget or (b) the cost is for a

substantially different use from any

expected use of funds in such a line

item, allotment, or allocation. If the cost

of an employee was allocated to

administrative leave to a greater extent

than was expected, the cost of such

administrative leave may be covered

using payments from the Fund.

49. Are States permitted to use

Coronavirus Relief Fund payments to

satisfy non-federal matching

requirements under the Stafford Act,

including ‘‘lost wages assistance’’

authorized by the Presidential

Memorandum on Authorizing the Other

Needs Assistance Program for Major

Disaster Declarations Related to

Coronavirus Disease 2019 (August 8,

2020)?

Yes. As previous guidance has stated,

payments from the Fund may be used to

meet the non-federal matching

requirements for Stafford Act assistance

to the extent such matching

requirements entail COVID–19-related

costs that otherwise satisfy the Fund’s

eligibility criteria and the Stafford Act.

States are fully permitted to use

payments from the Fund to satisfy 100%

of their cost share for lost wages

assistance recently made available

under the Stafford Act. If a State makes

a payment to an individual under the

‘‘lost wages assistance’’ program and

later determines that such individual

was ineligible for the program, the

ineligibility determination has the

following consequences:

• The State incurs an obligation to

FEMA in the amount of the payment to

the ineligible individual. A State’s

obligation to FEMA for making an

improper payment to an individual

under the ‘‘lost wages assistance’’

program is not incurred due to the

public health emergency and, therefore,

payments made pursuant to this

obligation would not be an eligible use

of the Fund.

• The ‘‘lost wages assistance’’

payment to the ineligible individual

would be deemed to be an ineligible

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expense for purposes of the Fund, and

any amount charged to the Fund (e.g.,

to satisfy the initial non-federal

matching requirement) would be subject

to recoupment.

50. At what point would costs be

considered to be incurred in the case of

a grant made by a State, local, or tribal

government to cover interest and

principal amounts of a loan, such as

might be provided as part of a small

business assistance program in which

the loan is made by a private

institution?

A grant made to cover interest and

principal costs of a loan, including

interest and principal due after the

period that begins on March 1, 2020,

and ends on December 31, 2021 (the

‘‘covered period’’), will be considered to

be incurred during the covered period if

(i) the full amount of the loan is

advanced to the borrower within the

covered period and (ii) the proceeds of

the loan are used by the borrower to

cover expenses incurred during the

covered period. In addition, if these

conditions are met, the amount of the

grant will be considered to have been

used during the covered period for

purposes of the requirement that

expenses be incurred within the covered

period. Such a grant would be

analogous to a loan provided by the

Fund recipient itself that incorporates

similar loan forgiveness provisions. As

with any other assistance provided by a

Fund recipient, such a grant would need

to be determined by the recipient to be

necessary due to the public health

emergency.

51. If governments use Fund payments

as described in the Guidance to

establish a grant program to support

businesses, would those funds be

considered gross income taxable to a

business receiving the grant under the

Internal Revenue Code (Code)?

Please see the answer provided by the

Internal Revenue Service (IRS) available

at https://www.irs.gov/newsroom/cares-

act-coronavirus-relief-fund-frequently-

asked-questions.

52. If governments use Fund payments

as described in the Guidance to

establish a loan program to support

businesses, would those funds be

considered gross income taxable to a

business receiving the loan under the

Code?

Please see the answer provided by the

IRS available at https://www.irs.gov/

newsroom/cares-act-coronavirus-relief-

fund-frequently-asked-questions.

53. May Fund recipients incur expenses

associated with the safe reopening of

schools?

Yes, payments from the Fund may be

used to cover costs associated with

providing distance learning (e.g., the

cost of laptops to provide to students) or

for in-person learning (e.g., the cost of

acquiring personal protective equipment

for students attending schools in-person

or other costs associated with meeting

Centers for Disease Control guidelines).

Treasury recognizes that schools are

generally incurring an array of COVID–

19-related expenses to either provide

distance learning or to re-open. To this

end, as an administrative convenience,

Treasury will presume that expenses of

up to $500 per elementary and

secondary school student are eligible

expenditures, such that schools do not

need to document the specific use of

funds up to that amount.

If a Fund recipient avails itself of the

presumption in accordance with the

previous paragraph with respect to a

school, the recipient may not also cover

the costs of additional re-opening aid to

that school other than those associated

with the following, in each case for the

purpose of addressing COVID–19:

• Expanding broadband capacity;

• hiring new teachers;

• developing an online curriculum;

• acquiring computers and similar

digital devices;

• acquiring and installing additional

ventilation or other air filtering

equipment;

• incurring additional transportation

costs; or

• incurring additional costs of

providing meals.

Across all levels of government, the

presumption is limited to $500 per

student, e.g., if a school is funded by a

state and a local government, the

presumption claimed by each recipient

must add up to no more than $500.

Furthermore, if a Fund recipient uses

the presumption with respect to a

school, any other Fund recipients

providing aid to that school may not use

the Fund to cover the costs of additional

aid to schools other than with respect to

the specific costs listed above.

The following examples help

illustrate how the presumption may or

may not be used:

Example 1: State A may transfer Fund

payments to each school district in the

State totaling $500 per student. State A

does not need to document the specific

use of the Fund payments by the school

districts within the State.

Example 2: Suppose State A from

example 1 transferred Fund payments to

the school districts in the State in the

amount of $500 per elementary and

secondary school student. In addition,

because State A is availing itself of the

$500 per elementary and secondary

school student presumption, State A

also may use Fund payments to expand

broadband capacity and to hire new

teachers, but it may not use Fund

payments to acquire additional

furniture.

54. May Fund recipients upgrade

critical public health infrastructure,

such as providing access to running

water for individuals and families in

rural and tribal areas to allow them to

maintain proper hygiene and defend

themselves against the virus?

Yes, fund recipients may use

payments from the Fund to upgrade

public health infrastructure, such as

providing individuals and families

access to running water to help reduce

the further spread of the virus. As

required by the CARES Act, expenses

associated with such upgrades must be

incurred by December 31, 2021. Please

see Treasury’s Guidance as updated on

June 30 regarding when a cost is

considered to be incurred for purposes

of the requirement that expenses be

incurred within the covered period.

55. How does a government address the

requirement that the allowable

expenditures are not accounted for in

the budget most recently approved as of

March 27, 2020, once the government

enters its new budget year on July 1,

2020 (for governments with June 30

fiscal year ends) or October 1, 2020 (for

governments with September 30 year

ends)?

As provided in the Guidance, the

‘‘most recently approved’’ budget refers

to the enacted budget for the relevant

fiscal period for the particular

government, without taking into

account subsequent supplemental

appropriations enacted or other

budgetary adjustments made by that

government in response to the COVID–

19 public health emergency. A cost is

not considered to have been accounted

for in a budget merely because it could

be met using a budgetary stabilization

fund, rainy day fund, or similar reserve

account.

Furthermore, the budget most recently

approved as of March 27, 2020, provides

the spending baseline against which

expenditures should be compared for

purposes of determining whether they

may be covered using payments from

the Fund. This spending baseline will

carry forward to a subsequent budget

year if a Fund recipient enters a

different budget year between March 27,

2020 and December 31, 2021. The

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spending baseline may be carried

forward without adjustment for

inflation.

56. Does the National Environmental

Policy Act, 42 U.S.C. 4321 et seq,

(NEPA) apply to projects supported by

payments from the Fund?

NEPA does not apply to Treasury’s

administration of the Fund. Projects

supported with payments from the Fund

may still be subject to NEPA review if

they are also funded by other federal

financial assistance programs

57. Public universities have incurred

expenses associated with providing

refunds to students for education-

related expenses, including tuition,

room and board, meal plans, and other

fees (such as activities fees). Are these

types of public university student

refunds eligible uses of Fund payments?

If the responsible government official

determines that expenses incurred to

refund eligible higher education

expenses are necessary and would be

incurred due to the public health

emergency, then such expenses would

be eligible as long as the expenses

satisfy the other criteria set forth in

section 601(d) of the Social Security

Act. Eligible higher education expenses

may include, in the reasonable

judgment of the responsible government

official, refunds to students for tuition,

room and board, meal plan, and other

fees (such as activities fees). Fund

payments may not be used for expenses

that have been or will be reimbursed by

another federal program (including, for

example, the Higher Education

Emergency Relief Fund administered by

the Department of Education).

58. May payments from the Fund be

used for real property acquisition and

improvements and to purchase

equipment to address the COVID–19

public health emergency?

The expenses of acquiring or

improving real property and of

acquiring equipment (e.g., vehicles) may

be covered with payments from the

Fund in certain cases. For example,

Treasury’s initial guidance referenced

coverage of the costs of establishing

temporary public medical facilities and

other measures to increase COVID–19

treatment capacity, including related

construction costs, as an eligible use of

funds. Any such use must be consistent

with the requirements of section 601(d)

of the Social Security Act as added by

the CARES Act.

As with all uses of payments from the

Fund, the use of payments to acquire or

improve property is limited to that

which is necessary due to the COVID–

19 public health emergency. In the

context of acquisitions of real estate and

acquisitions of equipment, this means

that the acquisition itself must be

necessary. In particular, a government

must (i) determine that it is not able to

meet the need arising from the public

health emergency in a cost-effective

manner by leasing property or

equipment or by improving property

already owned and (ii) maintain

documentation to support this

determination. Likewise, an

improvement, such as the installation of

modifications to permit social

distancing, would need to be

determined to be necessary to address

the COVID–19 public health emergency.

Previous guidance regarding the

requirement that payments from the

Fund may only be used to cover costs

that were incurred during the period

that begins on March 1, 2020, and ends

on December 31, 2021 focused on the

acquisition of goods and services and

leases of real property and equipment,

but the same principles apply to

acquisitions and improvements of real

property and acquisitions of equipment.

Such acquisitions and improvements

must be completed and the acquired or

improved property or acquisition of

equipment be put to use in service of

the COVID–19-related use for which it

was acquired or improved by December

30. Finally, as with all costs covered

with payments from the Fund, such

costs must not have been previously

accounted for in the budget most

recently approved as of March 27, 2020.

59. If a small business received a Small

Business Administration (SBA) Payment

Protection Program (PPP) or Economic

Injury Disaster Loan (EIDL) grant or loan

due to COVID–19, may the small

business also receive a grant from a unit

of government using payments from the

Fund?

Receiving a PPP or EIDL grant or loan

for COVID–19 would not necessarily

make a small business ineligible to

receive a grant from Fund payments

made to a recipient. As discussed in

previous Treasury guidance on use of

the Fund, a recipient’s small business

assistance program should be tailored to

assist those businesses in need of such

assistance. In assessing the business’

need for assistance, the recipient would

need to take into account the business’

receipt of the PPP or EIDL loan or grant.

If the business has received a loan from

the SBA that may be forgiven, the

recipient should assume for purposes of

determining the business’ need that the

loan will be forgiven. In determining the

business’ eligibility for the grant, the

recipient should not rely on self-

certifications provided to the SBA.

If the grant is being provided to the

small business to assist with particular

expenditures, the business must not

have already used the PPP or EIDL loan

or grant for those expenditures. The

assistance provided from the Fund

would need to satisfy all of the other

requirements set forth in section 601(d)

of the Social Security Act as discussed

in Treasury’s guidance and FAQs, and

the business would need to comply with

all applicable requirements of the PPP

or EIDL program.

Treasury’s Office of Inspector General

has provided the following guidance in

its FAQ no. 75 on reporting and

recordkeeping that would apply to the

recipient:

The prime recipient is responsible for

determining the level and detail of

documentation needed from the sub-

recipient of small business assistance to

satisfy [the requirements of section

601(d) of the Social Security Act],

however, there would need to be some

proof that the small business was

impacted by the public health

emergency and was thus eligible for the

CRF funds.

In the above OIG FAQ, ‘‘sub-

recipient’’ refers to the beneficiary of the

assistance, i.e., the small business.

B. Questions Related to Administration

of Fund Payments

1. Do governments have to return

unspent funds to Treasury?

Yes. Section 601(f)(2) of the Social

Security Act, as added by section

5001(a) of the CARES Act, provides for

recoupment by the Department of the

Treasury of amounts received from the

Fund that have not been used in a

manner consistent with section 601(d)

of the Social Security Act. If a

government has not used funds it has

received to cover costs that were

incurred by December 31, 2021, as

required by the statute, those funds

must be returned to the Department of

the Treasury.

2. What records must be kept by

governments receiving payment?

A government should keep records

sufficient to demonstrate that the

amount of Fund payments to the

government has been used in

accordance with section 601(d) of the

Social Security Act.

3. May recipients deposit Fund

payments into interest bearing

accounts?

Yes, provided that if recipients

separately invest amounts received from

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the Fund, they must use the interest

earned or other proceeds of these

investments only to cover expenditures

incurred in accordance with section

601(d) of the Social Security Act and the

Guidance on eligible expenses. If a

government deposits Fund payments in

a government’s general account, it may

use those funds to meet immediate cash

management needs provided that the

full amount of the payment is used to

cover necessary expenditures. Fund

payments are not subject to the Cash

Management Improvement Act of 1990,

as amended.

4. May governments retain assets

purchased with payments from the

Fund?

Yes, if the purchase of the asset was

consistent with the limitations on the

eligible use of funds provided by section

601(d) of the Social Security Act.

5. What rules apply to the proceeds of

disposition or sale of assets acquired

using payments from the Fund?

If such assets are disposed of prior to

December 31, 2021, the proceeds would

be subject to the restrictions on the

eligible use of payments from the Fund

provided by section 601(d) of the Social

Security Act.

6. Are Fund payments to State,

territorial, local, and tribal governments

subject to the provisions of the Uniform

Guidance applicable to grant

agreements?

No. Fund payments made by Treasury

to State, territorial, local, and Tribal

governments do not entail grant

agreements and thus the provisions of

the Uniform Guidance (2 CFR part 200)

applicable to grant agreements do not

apply. The payments constitute ‘‘other

financial assistance’’ under 2 CFR

200.40.

7. Are Fund payments considered

federal financial assistance for purposes

of the Single Audit Act?

Yes, Fund payments are considered to

be federal financial assistance subject to

the Single Audit Act (31 U.S.C. 7501–

7507) and the related provisions of the

Uniform Guidance, 2 CFR 200.303

regarding internal controls, §§ 200.330

through 200.332 regarding subrecipient

monitoring and management, and

subpart F regarding audit requirements.

8. Are Fund payments subject to other

requirements of the Uniform Guidance?

Fund payments are subject to the

following requirements in the Uniform

Guidance (2 CFR part 200): 2 CFR

200.303 regarding internal controls, 2

CFR 200.330 through 200.332 regarding

subrecipient monitoring and

management, and subpart F regarding

audit requirements.

9. Is there a Catalog of Federal Domestic

Assistance (CFDA) number assigned to

the Fund?

Yes. The CFDA number assigned to

the Fund is 21.019.

10. If a State transfers Fund payments to

its political subdivisions, would the

transferred funds count toward the

subrecipients’ total funding received

from the federal government for

purposes of the Single Audit Act?

Yes. The Fund payments to

subrecipients would count toward the

threshold of the Single Audit Act and 2

CFR part 200, subpart F re: audit

requirements. Subrecipients are subject

to a single audit or program-specific

audit pursuant to 2 CFR 200.501(a)

when the subrecipients spend $750,000

or more in federal awards during their

fiscal year.

11. Are recipients permitted to use

payments from the Fund to cover the

expenses of an audit conducted under

the Single Audit Act?

Yes, such expenses would be eligible

expenditures, subject to the limitations

set forth in 2 CFR 200.425.

12. If a government has transferred

funds to another entity, from which

entity would the Treasury Department

seek to recoup the funds if they have not

been used in a manner consistent with

section 601(d) of the Social Security

Act?

The Treasury Department would seek

to recoup the funds from the

government that received the payment

directly from the Treasury Department.

State, territorial, local, and Tribal

governments receiving funds from

Treasury should ensure that funds

transferred to other entities, whether

pursuant to a grant program or

otherwise, are used in accordance with

section 601(d) of the Social Security Act

as implemented in the Guidance.

13. What are the differences between a

subrecipient and a beneficiary under the

Fund for purposes of the Single Audit

Act and 2 CFR part 200, subpart F

regarding audit requirements?

The Single Audit Act and 2 CFR part

200, subpart F regarding audit

requirements apply to any non-federal

entity, as defined in 2 CFR 200.69, that

receives payments from the Fund in the

amount of $750,000 or more. Non-

federal entities include subrecipients of

payments from the Fund, including

recipients of transfers from a State,

territory, local government, or tribal

government that received a payment

directly from Treasury. However,

subrecipients would not include

individuals and organizations (e.g.,

businesses, non-profits, or educational

institutions) that are beneficiaries of an

assistance program established using

payments from the Fund. The Single

Audit Act and 2 CFR part 200, subpart

F regarding audit requirements do not

apply to beneficiaries.

Please see Treasury Office of

Inspector General FAQs at https://

www.treasury.gov/about/organizational-

structure/ig/Audit%20Reports

%20and%20Testimonies/OIG-CA-20-

028.pdf regarding reporting in the

GrantSolutions portal.

Dated: January 11, 2021.

Alexandra H. Gaiser,

Executive Secretary.

[FR Doc. 2021–00827 Filed 1–14–21; 8:45 am]

BILLING CODE 4810–25–P

DEPARTMENT OF VETERANS

AFFAIRS

Joint Biomedical Laboratory Research

and Development and Clinical Science

Research and Development Services

Scientific Merit Review Board,

Amended Notice of Meeting

The Department of Veterans Affairs

(VA) gives notice under Federal

Advisory Committee Act, 5 U.S.C.

App.2, that a meeting of the Joint

Biomedical Laboratory Research and

Development and Clinical Science

Research and Development Services

Scientific Merit Review Board (JBL/CS

SMRB) will be held Thursday, January

21, 2021, via WebEx. The meeting will

begin at 3:00 p.m. and end at 5:00 p.m.

Eastern daylight time. The meeting will

have an open session from 3:00 p.m.

until 3:30 p.m. and a closed session

from 3:30 p.m. until 5:00 p.m.

The purpose of the open session is to

meet with the JBL/CS Service Directors

to discuss the overall policies and

process for scientific review, as well as

disseminate information among the

Board members regarding the VA

research priorities.

The purpose of the closed session is

to provide recommendations on the

scientific quality, budget, safety and

mission relevance of investigator-

initiated research applications

submitted for VA merit review

evaluation. Applications submitted for

review include various medical

specialties within the general areas of

biomedical, behavioral and clinical

science research. The JBL/CS SMRB

meeting will be closed to the public for

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