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

July 23, 2020

**Shaheen, Murkowski Previously Led Colleagues in Letter Urging a Fix for Provision Blocking NH and Other States from Receiving Further Relief to Help Address Economic Impacts of COVID-19**

**As a Result of the “Maximum Allotment” Provision, $43.5 Million in Urgently Needed Federal Funding is being withheld from Impacted States**

(Washington, DC) – Today, U.S. Senators Jeanne Shaheen (D-NH) and Lisa Murkowski (R-AK) introduced 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. 

“States like New Hampshire with smaller populations have been unfairly cut out of critical federal aid that we need to help our frontline organizations and workers respond to the full scope of the economic and health crisis created by the COVID-19 pandemic,” said Senator Shaheen. “This legislation is a smart, bipartisan fix to the law to ensure communities dealing with the fallout from this unprecedented emergency have access to the resources they need to weather this storm. In New Hampshire, our five Community Action Agencies rely on CSBG funds to support the most vulnerable Granite Staters in combating housing, employment, education and food security challenges. Freeing up this funding will provide the certainty and security smaller states need to fight through these challenging times. I appreciate Senator Murkowski’s partnership on this effort and I’ll keep working across the aisle to get this legislation through the Senate.”

“Due to statutory constraints in the Community Services Block Grant formula, states with smaller populations such as Alaska have been unable to receive their entire share of funding appropriated in the CARES Act,” said Senator Murkowski. “This legislation will make a small, but necessary change to clarify that the maximum allotment provision does not apply to supplemental appropriations for FY2020, allowing “small” states to receive their fair share of funding. It’s pivotal that Alaska receives their remaining $5 million CARES Act CBSG funding, that is currently being withheld at HHS – these are critical dollars to support impoverished and economically impacted communities across the state." 

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.

Shaheen and Murkowski previously led a group of Senators in a letter to 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.

The legislation is also cosponsored by Senators Sanders (I-VT), Barrasso (R-WY), Hirono (D-HI), Cramer (R-ND), Cortez Masto (D-NV), Sullivan (R-AK), Hassan (D-NH), Rosen (D-NV) and Hoeven (R-ND). Bill text is available here.