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The provision allocates $25 billion for fiscal year 2021 for the new federal Emergency Rental Assistance program to provide financial assistance and housing stability services to certain eligible households. Financial assistance for eligible households requires that at least 90 percent of the funds received be used for:
Rent,
Rental arrears,
Utilities and home energy costs,
Utilities and home energy cost arrears, and
Other expenses related to housing that are incurred either directly or indirectly due to COVID-19.
No more than 10 percent of the funds can be used by grantees for housing stability services including providing case management and other services related to COVID-19.
Eligible households may receive up to 12 months of funding, plus an additional three months if necessary to ensure housing stability, and subject to the availability of funds. The payments that are made on behalf of eligible households will not be considered income and are not regarded as a resource for purposes of determining the eligibility of the household or any member of the household for benefits or assistance, under any federal program, or federally funded state or local program.
Eligible households may generally only received three months prospective rent payments, but may receive additional prospective rent payments, subject to the availability of funds and the 12 month maximum. Rent in arrears must be provided for first, after which prospective rent payments can be made.
An eligible household is defined as one or more individuals who are obligated to pay rent on a residential dwelling, and one or more such individuals:
Qualifies for unemployment benefits, or has experienced a reduction in household income, incurred significant costs, or other financial hardship caused by COVID-19,
At least one of the individuals demonstrates a risk of homelessness or housing instability, and
The household income is not more than 80 percent of the area median household income.
Applications for rental assistance must be considered first if either an eligible household’s income is at or below 50 percent of the area median income, or one or more members in the household is unemployed for 90 days or more before the submission date of the application.
California generally conforms to the federal definition of gross income, with modifications, as of the specified date of 1/1/2015.
Senate Bill 91, Chaptered 1/29/2021, establishes 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. Under Section 50897.1(j)(1) of the Health and Safety Code, the bill exempts any assistance provided from income, for purposes of the PITL or used to determine eligibility for an eligible household, or any member of an eligible household, for any state program or local program financed wholly or in part by state funds.
Senate Bill 91 is effective immediately and operative for taxable years beginning on or after 1/1/2021.
Assembly Bill 81, Chaptered 2/23/2021, makes several non-substantive technical and conforming changes to Section 50897.1 of the Health and Safety Code. Assembly Bill 81 is effective immediately and operative for taxable years beginning on or after 1/1/2021.
California exempts the assistance payments provided by the federal Emergency Rental Assistance program from California taxable income for taxable years beginning on or after 1/1/2021. In addition, forgiveness of rent liability under this provision is not included in taxable income for taxable years beginning on or after 1/1/2020 and before 1/1/2025.
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