CARH’S BROADCAST E-MAIL – Legislative Update

October 10, 2015

As was reported in the September 24^th broadcast email, the Senate’s version of the Continuing Resolution  (CR) for Fiscal Year (FY) 2016 contained language that would provide for a short term resolution to the funding issues plaguing Rural Development’s (RD) Rental Assistance (RA) program. The final bill, which passed the Congress and was signed into law by the President, (Public Law (P.L. 114-53) retained this Senate language. Thus, the CR permits RD to receive a greater allocation of funding for the RA program than they used last year at this time and also gives the Secretary the ability to waive the re-renewal prohibition for the terms of the legislation, which expires on December 11, 2015.

Both provisions are important and a step toward favorably resolving the RA problems created by the FY 2015 budget, meaning that RA contracts that ran out of money during FY 2015 should be funded as well as those that will expire in the first quarter of FY 2016 and prior to December 11, 2015, when the CR expires. It will then be contingent that Congress either pass another short-term CR or an Omnibus bill that will provide funding for government programs through the entire fiscal year. The circumstances surrounding a smooth CR or Omnibus is very cloudy in light of the change in Republican leadership in the House of Representatives and the ongoing political positions between Congress and the Administration. A temporary federal shutdown is possible as is a deal that restores sequestration cuts. So far, housing programs (other than the HOME program) have fared relatively well compared to other federal domestic discretionary programs. The RA shortage is a result of the Administration failing to ask Congress for sufficient funds, but there is the risk that general sequestration cuts will come in as well.

While the government is being funded as a result of Congress passing the CR and the President signing it into law, it usually takes the Office of Management and Budget (OMB) a couple of weeks after enactment to distribute funds to agencies for program activities. Therefore, many rural housing providers will not see new RA funds in their accounts for perhaps another week or even longer. On Wednesday, October 7^th, the national RD staff had a conference call with CARH and other industry representatives. In the call RD indicated that they were still working on procedures for providing monies for the properties that ran out of RA in FY 2015, as well as how they would credit residents who were asked to pay what had been the government’s portion of their rent during this time.

In addition, officials also told the industry that they expect the RA program would again run out of money in FY 2016, even if Congress fully funded the budget as requested by the Administration. The budget request for FY 2016 is $1.172 billion and the House and Senate versions of the FY 2016 United States Department of Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations bills (H.R. 3049 and S. 1800) only provide $1.167 billion. It is estimated that RD will need at least $221 million more in FY 2016 to fully fund contracts.

It is therefore vital that CARH members continue in their grassroots contact with their members of Congress on this issue. As was reported in the September 24^th broadcast email, in addition to requesting this additional $221 million, CARH members need to have their members of Congress understand that the re-renewal language while gone for FY 2015 and for the term of the existing CR, the provision could reappear in a full year funding bill since again both the House and Senate versions of the full year appropriations bills for RD included the Administration requested re-renewal language.  (It would be appropriate for CARH members to explain that the extent of the RA crisis was not known until after both the House and Senate Appropriations Committees considered their versions of the funding bills.)

The Agency has noted that the shortage has occurred because the Agency is moving from a state averaging system to a per project budget based system. We have advised the Agency that the RA statue already requires the Agency to fund projects on a per project budget system.  Any state formula funding is a statutory violation.

Again, it is important that you make your contacts with your members of Congress personal and that, while in the short-term the crisis has lessened, after December 11^th residents could be faced with having to pay in rent what the government had paid for them in RA. Therefore involvement by residents in this issue is again warranted. Congress will be in recess the week of October 11^th and most likely be in their district/state offices. Again, that would be an appropriate time to meet and discuss the issue.

Click here to contact your Senators.

Click here to contact your Representatives.

Please keep the national CARH office appraised of any meetings and results of those meetings.  If you have any questions or need any additional information, please do not hesitate to contact CARH at 703-837-9001 or carh@carh.org.