Justification for Emergency Processing (Title I Projects)

DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220

March 29, 2024
TO:

Richard L. Revesz, Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget

FROM:

Ryan Law, Deputy Assistant Secretary
Office of Privacy, Transparency, and Records
U.S. Department of the Treasury

SUBJECT:

Justification for PRA Emergency Processing: State and Local Fiscal Recovery
Funds Updated Compliance and Reporting Guidance

Pursuant to the Office of Management and Budget (OMB) procedures established by the
Paperwork Reduction Act of 1995 (5 C.F.R. § 1320.13), the U.S. Department of the Treasury
(Treasury) requests emergency processing of a revision to OMB Control Number 1505-0271 for
the State and Local Fiscal Recovery Funds (SLFRF) program’s Supplemental Guidance for
Environmental Review Compliance and for approval to collect a new National Environmental
Policy Act (NEPA) Environmental Review Certification form for SLFRF Title I projects.
Collection is essential to the mission of the Department.
On March 11, 2021, the American Rescue Plan Act was signed into law and established
the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Funds,
which together make up the SLFRF program, administered by the Department of the Treasury.
This program is intended to provide support to State, territorial, local, and Tribal governments in
responding to the economic and public health impacts of the COVID-19 pandemic and in their
efforts to contain the impacts on their communities, residents, and businesses. This work is
critical to Treasury’s mission to maintain a strong economy and create economic and job
opportunities for the nation.
Since the establishment of this program, Treasury has awarded $350 billion in funding to
recipient governments and issued Compliance and Reporting Guidance detailing how these
SLFRF recipients must fulfill reporting requirements in accordance with the terms and
conditions of their SLFRF financial assistance agreements.
Unanticipated events prevented Treasury from complying with normal clearance
procedures for the requested revision.
On December 29, 2022, Congress amended the SLFRF program in the Consolidated
Appropriations Act, 2023 (CAA) to add three new eligible use categories for: emergency relief
from natural disasters, Surface Transportation projects, and Title I (Community Development
Block Grant (CDBG)) projects. The CAA imposes requirements on SLFRF funds used for
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Surface Transportation projects and Title I projects beyond those requirements that apply to all
other SLFRF eligible use categories, necessitating substantial updates to program rules and
guidance. Accomplishing this required Treasury to seek expertise from and coordinate
extensively with other Federal agencies.
Treasury worked closely with the U.S. Department of Transportation (DOT), the Federal
Emergency Management Agency (FEMA), and the Department of Housing and Urban
Development (HUD) throughout 2023 to craft an interim final rule (IFR) and lay out a strategy
for implementing the three new eligible uses of SLFRF funds. This IFR implementing the three
new eligible use categories was published in the Federal Register on September 20, 2023 (88 FR
64986) and started a 60-day public comment period that closed on November 20, 2023.
Additionally, on November 20, 2023, Treasury published the Obligation interim final rule
(Obligation IFR) in the Federal Register (88 FR 80584), which revised the definition of
“obligation” in Treasury’s implementing regulations for the SLFRF program and provided
related guidance to give additional flexibility and clarity to recipients to support their use of
SLFRF award funds. This was necessary as the CAA amendments provided that funds may be
obligated for Surface Transportation projects, and Title I projects until December 31, 2024, and
must be expended by September 30, 2026. Public comments were solicited on the Obligation
IFR for 30 days (ending Dec 20, 2023).
Upon review of comments on these IFRs, Treasury entered into memorandums of
agreement (MOAs) with DOT and HUD articulating how the agencies would coordinate to
implement new eligible uses. DOT signed and returned their MOA on January 10, 2024, and
HUD signed and returned their MOA on Title I project spending to Treasury on February 9,
2024.
While these rules provided a framework for implementing the three new uses, they noted
that Treasury would need to amend the SLFRF Compliance and Reporting Guidance to describe
in detail how recipients would provide the additional information required. Diligent work with
other federal agencies on the best path forward with the least administrative burden to recipients
has meant that Treasury relied heavily on the federal agency partners and did not have sole
control of the timeline to get the interim final rules published and of getting final MOAs
executed. Only after MOA execution could the final updated guidance be drafted for
consideration.
The SLFRF program has over 30,000 local government recipients, including nonentitlement units of government (NEUs), which are typically not direct recipients of DOT or
HUD Title I CDBG funding, and thus are not familiar with the reporting requirements associated
with those funds and programs. The guidance Treasury provided, therefore, needed to be crafted
with these recipients in mind and taking into account the comments and questions they provided
in response to the IFRs.
Treasury submitted an emergency revision to 1505-0271 in September 2023 alongside
the IFR in order to address the three new eligible uses, however it could not include the increased
burden and full details of the new information to be collected in connection with Title I projects
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as those MOAs had not yet been executed and thus the new supplemental guidance could not
have been created.
The use of normal clearance procedures is reasonably likely to prevent or disrupt the
collection of information and is reasonably likely to cause a statutory deadline to be missed.
Treasury has recently completed the supplemental guidance for recipients wishing to use
SLFRF funds to pursue projects and activities under the three new eligible use categories,
however time is very limited for SLFRF recipients to complete all the necessary steps to obligate
funds for these projects before December 31, 2024. Following normal PRA clearance procedures
before issuing the revised guidance would consume approximately half of the remaining eight
months before the statutory deadline to obligate funds, making it reasonably likely that most
recipients would be unable to do so.
For example, this guidance outlines the process that recipients must undertake to satisfy
NEPA environmental review requirements for Title I projects, including how to submit an
Environmental Review Certification to Treasury for approval. (NEPA compliance is waived for
other SLFRF projects.) The MOA with HUD lays out that SLFRF recipients will use the HUD
Environmental Review Online System (HEROS) to complete their environmental reviews for
Title I projects just as any Title I recipient would, however due to technical constraints, it does
not require HUD to automatically provide environmental review records completed by SLFRF
recipients to Treasury. 1 Treasury must rely on SLFRF recipients to notify Treasury when they
need project approval. Further, the MOA delegates to Treasury responsibility to provide
approvals to SLFRF recipients on projects that require it. 2 Per the CAA, this pre-approval from
Treasury must be obtained before projects can commence. This is the first time that Treasury has
had to pre-approve project spending through the SLFRF program, and if those novel reviews
could not commence until mid-to-late 2024 it would likely leave insufficient time following
approval for recipients to execute their projects to the degree needed to obligate funds before the
end of the year.
Treasury is also nearing completion on updates to the reporting portal that recipients will
use to transmit the necessary information required for NEPA and under the Obligation interim
final rule. The online portal is expected to go live around April 1, 2024, with 2,000 recipients
required to file quarterly Project and Expenditure Reports and 26,000 recipients required to
submit annual Project and Expenditure Reports by April 30, 2024. This is in accordance with the
timelines for the program as set out in the Reporting Guidance and which have been utilized
since the program started requiring reporting. This timeline for reporting was developed with
input and approval from the Pandemic Response Accountability Committee (PRAC) – the
statutorily-authorized independent oversight committee for pandemic-related programs. Treasury
will need to provide guidance to recipients ahead of or soon after the portal launch date so that
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Using the HEROS system for environmental reviews—a known and workable system with all the necessary
statutory guidelines in place--was more efficient than building a new system within Treasury, thus the agreement to
allow SLFRF recipients to use this system is a key component of implementation for Title I eligible uses as
contemplated in the CAA.
2
Title I projects requiring Treasury approval before SLFRF funds can be spent include projects that qualify as
Categorically Excluded Subject To (CEST) and projects requiring an Environmental Assessment.

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they can start gathering the necessary information needed to be submitted both for quarterly and
annual reports due April 30 and prior to the Obligation deadline of December 31, 2024. Without
emergency approval, Treasury’s ability to collect this information would be disrupted.
Public harm is reasonably likely to result if normal clearance procedures are followed.
As noted previously, the clarification provided in the supplemental guidance related to
environmental reviews for Title I projects will require small revisions to the information to be
provided in recipients’ Project and Expenditure Report submissions, and in the online portal on
the same timeline. It will also require an incremental data collection by Treasury of an
Environmental Review Certification form, which Treasury will need to approve before recipients
may use SLFRF award funds on certain Title I projects (in accordance with the 2023 interim
final rule). Treasury developed the Environmental Review Certification in close consultation
with HUD, and the HUD regulations for environmental review at 24 CFR part 58 generally apply
to the Title I projects eligible use category. Given recipients’ need to submit and gain approval of
the certification before using SLFRF funds on certain Title I projects and the December 31, 2024
deadline to obligate SLFRF funds, Treasury will need to solicit these certifications expeditiously
in order to provide recipients with sufficient time to obligate funds for Title I projects.
If this emergency processing is not granted, Treasury will likely not be able to solicit
Environmental Review Certifications from SLFRF recipients for Title I projects needing
approval until fall 2024. Particularly for any NEU undertaking Title I spending for the very first
time, this would result in a very short time frame to be in compliance with NEPA reporting and
receive project approval before the obligation deadline. The inability of Treasury to collect the
information and provide the necessary pre-approval may reasonably result in some unobligated
funds by the deadline if timely approval for these projects to move to construction phase are not
provided. This would harm recipients contemplating projects under the Title I eligible uses who
would not be able to fully execute these projects for the benefit of their communities. Treasury
would also face potential litigation risk from recipients who may challenge the Department if it
failed to practically enable SLFRF funds to be applied to these additional eligible uses as
Congress’ intended.
Practicable steps have been taken to consult with interested agencies and members of the
public to minimize the burden of the collection of information.
Treasury has taken all practical steps to consult with the public and other relevant
agencies in developing both the existing and new SLFRF collections of information and
minimizing the burden on the public. The Department solicited public comment on SLFRF
reporting and recordkeeping requirements on Sept 16, 2021 (86 FR 51727) and Feb 25, 2022 (87
FR 10896), following normal clearance procedures and subsequently received a full 3-year OMB
approval for the SLFRF program’s data collections under 1505-0271
As noted above, Treasury also solicited public comment for 60 days on the Sept 20, 2023
IFR and for 30 days on the Nov 20, 2023 Obligation IFR, in addition to extensive consultation
with other federal agencies. Comments on these rules included many questions from SLFRF

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program participants regarding how to handle their individual situations, which both informed
and highlighted the need for detailed updates to the Compliance and Reporting Guidance.
Given the public comments that have already been collected on the interim final rules,
seeking further public comment on the updated guidance following normal PRA clearance
procedures would be more likely to harm rather than enhance public interest due to the additional
delays it would entail.
Because the submission of NEPA forms and updated quarterly reporting is needed sooner
than could be obtained following non-emergency procedures, Treasury requests emergency
processing and approval by April 10, 2024 of the updated Compliance and Reporting Guidance
as well as the Environmental Review Certification. Given the impracticality of soliciting
comment during such a short timeframe, Treasury requests a waiver from the requirement to
publish notice in the Federal Register seeking public comment during OMB review.

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