Don’t Move the Goal Posts on Emergency Rental Aid for Rural States

WASHINGTON DC – Today, U.S. Senators Shelley Moore Capito (RW.Va.) and Joe Manchin (DW.Va.), members of the U.S. Senate Appropriations Committee, led 12 bipartisan senators in urging the U.S. Treasury Department not to not move the goal posts on Emergency Rental Assistance (ERA) 2 funds for states that have met ERA requirements set by Congress, including West Virginia. The U.S. Treasury Department said it plans to change the guidelines for states to receive their full allocation of ERA 2 funds.

“It has come to our attention that the Department of the Treasury (Treasury) is developing guidance regarding the reallocation of funds from Emergency Rental Assistance (ERA) 2. We are concerned that these guidelines seek to reallocate funds states that have demonstrated the need and ability to utilize all federal funding. Every state and locality that plans to spend this funding by the statutory deadline in 2025 should have access to the full funding levels originally allocated by Congress,” the senators said in part.

“To ensure that states use program funds rather than hold them, Congress required that states commit at least 75% of their initial funding tranche in order to receive their remaining share of ERA 2. Account Given these parameters, states like West Virginia, Mississippi, Rhode Island, Delaware, Hawaii, New Hampshire, and Colorado planned their use of ERA 2 funds based on the expiration date of the law, on September 30, 2025”, the Senators continued. “We call on the Treasury to provide full funding to states that have met the requirements set by Congress, rather than pursuing a clawback and reallocation policy that fails to meet the projections made by those states.”

Senators Capito and Manchin were joined by Senators Roger Wicker (R-Miss.), Jack Reed (DR.I.), Chris Coons (D-Del.), Mazie Hirono (D-Hawaii), Tom Carper (D -Del.), Cindy Hyde-Smith (R-Miss), Sheldon Whitehouse (DR.I.), Maggie Hassan (DN.H.), Michael Bennet (D-Colo.) and John Hickenlooper (D-Colo.) .

The Emergency Rent Assistance Program was created under the Consolidated Appropriations Act of 2021, which also provided $25 billion in seed funding for the program, known as ERA 1. After the adoption of the US Bailout Act (ARP) in March 2021, an additional $21.6 billion was allocated to the ERA 2 funding program. reallocation based on expense ratios beginning retroactively September 30, 2021 Since the U.S. Treasury Department announced these guidelines, states like West Virginia have planned their use of ERA 2 funds based on the date of the statutory expiration is September 30, 2025. Now the US Treasury Department has indicated that it will change the guidelines. to demand higher standards for states to receive their ERA funds, in direct contradiction to what was originally proposed by the Treasury.

The full letter is available below and here.

Dear Secretary Yellen:

It has come to our attention that the Department of the Treasury (Treasury) is developing guidelines regarding the reallocation of Emergency Rent Assistance (ERA) funds 2. We are concerned that these guidelines seek to reallocate funds from states that have demonstrated the need and ability to utilize all federal funding.

Every state and locality that plans to spend this funding before the 2025 statutory deadline should have access to the full funding levels originally allocated by Congress.

As you know, the Emergency Rental Assistance Program was established under the Consolidated Appropriation Act of 2021which also provided $25 billion in seed funding for the program, known as ERA 1. After the passage of the US Bailout Act (ARP) in March 2021, an additional $21.6 billion was allocated to the program to fund ERA 2. In each case, a small state minimum was established to ensure that states like the majority of ours were not left behind. for account.

On October 4, 2021, the Treasury released its ERA1 forecast with a clawback and reallocation policy based on expense ratios beginning retroactively on September 30, 2021. Without significant notice of this policy, it quickly became clear that many states would not could not meet the expense ratio thresholds. fixed by the Treasury and that a significant part of their allocations would be recovered and reallocated.

ERA 2 provides states with additional flexibility in how funds can be spent, additional time to spend funds, and provides more certainty for state housing agencies as funds cannot be reallocated. once transmitted by the Treasury. Additionally, to ensure that states use program funds rather than hold them, Congress required states to commit at least 75% of their initial funding tranche in order to receive their remaining share of ERA 2. .

Given these parameters, states like West Virginia, Mississippi, Rhode Island, Delaware, Hawaii, New Hampshire, and Colorado planned their use of ERA 2 funds based on when the law expires on September 30, 2025. We call on the Treasury to provide full funding for states that have met the requirements set by Congress, rather than pursuing a clawback and reallocation policy that falls short of the projections made by these states.

Basically, Congress knew that different states would spend their money at different rates. The reallocation process is there to ensure that the funds do not go unused, but if the funds are to be used within the statutory time limits, they must be made fully available to the state to which they were appropriated by Congress.

Thank you for your prompt attention to this issue.

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