On August 10, NASACT shared with members a copy of the U.S. Treasury’s State and Local Fiscal Recovery Fund (SLFRF) interim rule that illustrates how recipient governments can use their State and Local Fiscal Recovery Funds for natural disasters, community development, and surface transportation projects. The interim rule was officially published for comment in the Federal Register on Wednesday, September 20.
 
The provisions in the interim final rule are effective September 20, 2023.   

Direct comments must be received on or before November 20, 2023.  
 
Treasury is specifically seeking comment on sections addressing the new eligible uses: Emergency Relief from Natural Disasters, Surface Transportation projects, and Title I projects.
 

EMERGENCY RELIEF FROM NATURAL DISASTERS

The interim final rule provides significant flexibility for recipients to use SLFRF funds to provide emergency relief from the widespread physical and negative economic impacts of natural disasters.

1. Are there other types of services or costs that Treasury should consider as enumerated eligible uses to provide emergency relief from the physical or negative economic impacts of natural disasters? Describe how these provide emergency relief from natural disasters.
2. What, if any, additional criteria should Treasury consider to ensure that emergency relief responds to the physical or negative economic impacts of natural disasters?
3. What additional clarity or guidance would benefit recipients in identifying eligible mitigation activities?

 

SURFACE TRANSPORTATION PROJECTS

The interim rule also provides guidelines for additional requirements that apply to SLFRF funds used for Surface Transportation and Title I projects.

1. What, if any, additional clarification should Treasury provide as relates to determining whether Surface Transportation projects are eligible uses of the SLFRF?
2. What additional information or clarification is needed for recipients to understand the applicable program requirements for Pathway One for Surface Transportation projects?
3. What are the advantages and disadvantages of the eligibility criteria for the streamlined framework outlined in Pathway Two? Do these criteria adequately account for project risk in a manner that is both accurate and administrable? Why or why not?
4. What additional information or clarification is needed for recipients to understand the applicable program requirements for Pathway Two?
5. With respect to Pathway Two, what information should Treasury consider in developing the framework for projects outside the streamlined framework, in addition to the information that recipients will provide in the notices of intent? What types of projects do recipients intend to pursue under Pathway Two that would not be covered by the streamlined approach?

 
TITLE 1 PROJECTS
 

1. What, if any, additional clarification should Treasury provide as it relates to determining eligibility of projects under the Title I eligible use, or complying with program requirements such as CDBG national objectives or spending caps?
2. What additional information or clarification is needed for recipients to understand Treasury’s guidance on how recipients can use loans and revolving loan funds to support Title I eligible uses?
3. What if any additional flexibilities would benefit recipients in terms of the use of revolving loan funds across the SLFRF program or for particular uses in the Title I projects eligible use category? Please include a discussion of how additional flexibilities would comply with the December 31, 2024 obligation and December 31, 2026 expenditure deadlines.
4. What additional information or clarification is needed for recipients to understand Treasury’s guidance on how to comply with environmental review requirements for Title I projects?
5. What activities not already eligible under the public health and negative economic impacts eligible use category, as articulated in the 2022 final rule, are recipients interested in undertaking under the Title I projects eligible use category?

COMMENTS
 
NASACT will be preparing an association response to the interim rule and asks members to provide insights and comments for inclusion no later than COB on November 3, 2023. We also encourage you to respond directly to Treasury regarding the interim rule (please also cc NASACT) by adding your comments directly to the federal eRulemaking Portal. All comments should be captioned with ‘‘Coronavirus State and Local Fiscal Recovery Funds 2023 Interim Final Rule Comments.’’ Please include your name, organization affiliation, address, email address and telephone number in your comment. 

Please send your comments for inclusion in NASACT's response to Cornelia Chebinou by Friday, November 3.