Details of Public Law 117-2, section 3201 , Emergency Rental Assistance

This section appropriates $21.55 billion in funding to states, territories, and tribes to grant financial assistance for rent, utilities, and other household related expenses to an eligible household. Grantees may allocate funds to eligible households, which includes a household that:

Has one or more individuals that qualified for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship during or due, directly or indirectly, to the coronavirus pandemic.

Has one or more individuals that can demonstrate a risk of experiencing homelessness or housing instability.

Is a low-income family, as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

Funding is available to assist with rental payments for up to 18 months. This section also sets aside $2.5 billion for high-need grantees, which are areas with very low-income renter households paying more than 50 percent of income on rent or living in substandard or overcrowded conditions. Grantees may use excess funds for affordable rental housing and eviction prevention activities.

The section also extends the 2021 funds allocated under section 501 of the Consolidated Appropriations Act (CAA), PL 116-260, from 12/31/2021 to 9/30/2022.

California generally conforms to IRC section 61 as of the specified date of 1/1/2015, with modifications. California does not conform to the Emergency Rental Assistance program modifications under this section.

Senate Bill 91 (Stats. 2021, Ch. 2) established the State Rental Assistance Program to allocate federal rental assistance funds provided pursuant to the federal Emergency Rental Assistance program describe above, and uses the federal definition of eligible household.

California exempts the assistance payments provided by the federal Emergency Rental Assistance program, under section 501 of the CAA, from California taxable income for taxable years beginning on or after 1/1/2021, and provides that forgiveness of rent liability is not included in taxable income for taxable years beginning on or after 1/1/2020 and before 1/1/2025.