How does the ARP impact deadlines for the Emergency Rental Assistance Program?

Both the Consolidated Appropriations Act of 2021[1] ("CAA"), enacted December 27, 2020, and the American Rescue Plan of 2021[2] ("ARP"), enacted March 11, 2021, appropriated funds for the Emergency Rental Assistance ("ERA") Program. The CAA initially authorized and appropriated $25 billion for the program,[3] while the ARP authorized an additional $21.55 billion to be used for the program.[4]

The CAA initially required grantees to expend ERA funds ("ERA1") by December 31, 2021, with a possible 90-day extension if requested and approved by the U.S. Department of the Treasury ("Treasury") Secretary.[5] The ARP extended the expenditure deadline for ERA1 funds to September 30, 2022; however, there is no built-in provision for a 90-day extension past that deadline.[6] The ARP states:

Paragraph (1) of section 501(e) of subtitle A of title V of division N of the Consolidated Appropriations Act, 2021 (Public Law 116–260) is amended by striking "December 31, 2021" and inserting "September 30, 2022".[7]

Regarding ERA2’s expenditure deadline, ARP outlines that "funds provided to an eligible grantee under a payment made under this section shall remain available through September 30, 2025."[8]

In addition to monitoring the period of performance, recipients should monitor the percentage of ERA1 and ERA2 allocations that have been obligated. The CAA instructs Treasury to reallocate “excess funds” for ERA1.[9] For more information on reallocation, Treasury's Deputy Secretary Adeyemo published a letter [10] that highlights further details concerning the reallocation process. Treasury began identifying excess funds for potential allocation in mid-November.

Similarly for ERA2, ARP instructs Treasury to begin identifying excess funds beginning March 31, 2022.[11] The ERA2 Award Terms and Conditions further notes that recouped funds not spent by ERA grantees will be reallocated to entities that have spent at least 50 percent of their primary allocation.[12] The deadline to obligate funds that are reallocated under this provision is set forth as follows:

The period of performance for this award begins on the date hereof and ends on September 30, 2025. Recipient shall not incur any obligations to be paid with the funding from this award after such period of performance ends.[13]

The ARP also provided additional ERA funds for assistance, administration, and housing stability costs (ERA2). Treasury's distribution of 40 percent of the additional ERA2 funds was to occur no later than May 10, 2021.[14] The remaining ERA2 funds may be distributed to eligible grantees that obligate 75 percent of the previously provided funds.[15] The remaining funds may be released in tranches to qualifying grantees, and the timing and amount will be based on need, as determined by the Treasury Secretary.[16]

For further guidance on ERA fund use, it is advised to reference each respective program's award terms and conditions for ERA1[17] and ERA2[18] along with Treasury's ERA Frequently Asked Questions document.[19]

Grantees may consider tracking all ERA expenditures based on the funding sources (ERA1 vs. ERA2) to ensure compliance with the different expenditure deadlines and the eligible use requirements. Additionally, Treasury's Compliance and Reporting Guidance State and Local Fiscal Recovery Funds document states:

Where appropriate, recipients should also include information on your jurisdiction’s use (or planned use) of other federal recovery funds including other programs under the American Rescue Plan such as Emergency Rental Assistance, Housing Assistance, and so forth, to provide broader context on the overall approach for pandemic recovery.[20]

In summary, pursuant to Section 3201(h) of the ARP, the deadline for the usage of ERA1 funds is September 30, 2022, whereas pursuant to Section 3201(g), the deadline for the usage of ERA2 funds is September 30, 2025. It may be prudent for municipalities to engage counsel to ensure that recipients of ERA assistance under both the CAA (ERA1) and the ARP (ERA2) comply with statutory mandates, Treasury guidance, and all applicable federal, state, and local mandates.

Last Revised: December 27, 2021

[1] Consolidated Appropriations Act of 2021, available at: https://www.congress.gov/bill/116th-congress/house-bill/133/text.

[2] American Rescue Plan Act of 2021, § 9901, Pub. L. No. 117-2, amending 42 U.S.C. § 801 et seq., available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text#HAECAA3A95C4E4FFAB6AA46CE5F9CB2B5.

[3] Consolidated Appropriations Act of 2021, at (D)(V)(A)(501), available at: https://www.congress.gov/bill/116th-congress/house-bill/133/text.

[4] American Rescue Plan Act of 2021, § 9901, Pub. L. No. 117-2, at Section 3201(a), amending 42 U.S.C. § 801 et seq., available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text#H0EE2121A8C2946F79734BFEE40109302.

[5] Consolidated Appropriations Act of 2021, at (N)(X)(1001), amended Section 601(d)(3) of the Social Security Act (42 U.S.C. 801(d)(3)) by extending the end of the covered period for CRF expenditures from December 30, 2020, to December 31, 2021,90 day extension at Section 501 (e)(2), available at: https://www.congress.gov/bill/116th-congress/house-bill/133/text.

[6] American Rescue Plan Act of 2021, § 9901, Pub. L. No. 117-2, at Section 3201(h), amending 42 U.S.C. § 801 et seq., available at https://www.congress.gov/117/bills/hr1319/BILLS-117hr1319enr.pdf.

[7] Id., at Section 3201(h) (emphasis added).

[8] Id, at Section 3201(g) (emphasis added).

[9] Text - H.R.133 - 116th Congress (2019-2020): Consolidated Appropriations Act, 2021, H.R.133, 116th Cong. (2020), at Section 501(d), available at: https://www.congress.gov/bill/116th-congress/house-bill/133/text.

[10] Department of Treasury, Emergency Rental Assistance Program Grantee Letter (as of October 25, 2021), available at: Deputy-Secretary-Adeyemo-ERA-Program-Grantee-Letter-20211025.pdf (treasury.gov).

[11] American Rescue Plan Act of 2021, § 9901, Pub. L. No. 117-2, amending 42 U.S.C § 801

et seq., at Section 3201(e)(1)), available at: Text - H.R.1319 - 117th Congress (2021-2022): American Rescue Plan Act of 2021 | Congress.gov | Library of Congress.

[12] Id., at Paragraph 2.

[13] Id., at Paragraph 4.

[14] American Rescue Plan Act of 2021 § 9901, Pub. L. No. 117-2, at Section 3201(c)(1), amending 42 U.S.C § 801 et seq., available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text#HAECAA3A95C4E4FFAB6AA46CE5F9CB2B5.

[15] Id., at Section 3201(d)(1)(D)(ii).

[16] Id., at Section 3201(e)(3).

[17] Department of Treasury, Archived Grantee Award Terms for ERA1, available at: Emergency-rental-assistance-terms-FINAL.pdf (treasury.gov).

[18] Department of Treasury, Grantee Award Terms for ERA2, available at: https://home.treasury.gov/system/files/136/ERA2_Grantee_Award_Terms_572021.pdf.

[19] Department of Treasury, Emergency Rental Assistance Frequently Asked Questions (as of August 25, 2021), available at: Microsoft Word - ERA FAQ 8-25-2021 Upload Version (002) (treasury.gov).

[20] Department of Treasury, Compliance and Reporting Guidance State and Local Fiscal Recovery Funds (as of November 15, 2021), at 24, available at: https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf.