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Hassan, Colleagues Introduce New Legislation to Waive Provision in Law Preventing Smaller States from Accessing Necessary Financial Support for Community Services

(Washington, DC) – Today, U.S. Senator Maggie Hassan joined Senators Jeanne Shaheen (D-NH), Lisa Murkowski (R-AK), and other colleagues in introducing legislation that would address the “maximum allotment” provision that is significantly limiting the amount of Coronavirus Aid, Relief and Economic Security (CARES) Act relief funds that can be awarded to smaller states through the Community Services Block Grant (CSBG) program. The Senators’ bill waives the provision for the purposes of the CARES Act and any future supplemental CSBG funding provided by Congress for the remainder of Fiscal Year (FY) 2020. This will allow each of the 12 small states impacted by the maximum allotment provision to receive an extra $3.625 million in CSBG grants from the CARES Act, which is currently being withheld from the states due to the application of the maximum allotment provision.

The CARES Act provided an additional $1 billion to the CSBG program to provide urgently needed social services and emergency assistance to Americans impacted by the fallout of the COVID-19 pandemic. As a result of the “maximum allotment” provision within the CSBG Act, which authorizes CSBG grants, states face significant restrictions in the amount of CSBG funds that they can receive. The provision prevents smaller states from accessing the funds necessary to respond to the recent surge in demand for services. Specifically, Section 675B(b)(3) of the CSBG Act restricts smaller states from receiving more than 140 percent of the aggregate amount allotted to a state in the previous fiscal year. Due to the addition of supplemental CSBG funds from the CARES Act, the allotment for the current fiscal year exceeds this threshold. As a result, smaller states have only been able to receive $1.37 million in supplemental CSBG funds. Currently, $43.5 million in CSBG funding is being withheld that could otherwise be allocated to impacted states. States without this funding restriction were awarded up to $89 million in supplemental CSBG funds from the CARES Act, in addition to their standard allotment this fiscal year.

The Senators previously led a group of Senators in a letter Senate leadership raising this issue, where they highlighted the negative impact this provision is having on efforts to help address the economic effects of COVID-19 in their states, and urged that this funding cap be lifted.