5600 Fishers Lane • Rockville, MD 20857 

www.samhsa.gov • 1-877-SAMHSA-7 (1-877-726-4727) 

∙

July 17, 2020 

Dear State Authority for Mental and Substance Use Disorders: 

The COVID-19 pandemic has impacted the behavioral health of the nation in that many 

individuals with existing or newly developing mental and substance use disorders have 

experienced additional stressors through the declining economy and high unemployment rates. 

These health conditions will not only affect individuals who are in recovery, but also new 

individuals with mild to moderate symptoms because of prolonged stress and isolation. 

Accordingly, treatment providers will likely see increases in the demand for access to services. 

Additionally, individuals who have lost their employment, and the insurance that was tied to that 

employment, may result in the SAMHSA block grant funding being more important than ever in 

assisting states with funding their mental and substance use disorder programs. 

SAMHSA recognizes that COVID-19 may have also impacted your state through an economic 

downturn due to the loss of tax revenue and employment during state stay at home orders. Based 

on current economic projections, we understand that many states are not generating normal 

levels of tax revenue. Additionally, due to state closures and stay at home orders, critical 

services in the behavioral health field may have been impacted due to social distancing 

guidelines and it is expected that states will have spent less money overall on services this year, 

which may create additional maintenance of effort (MOE) shortfall considerations. If this is the 

case, it may be possible that your state will be unable to fulfill your MOE requirement this year. 

Extraordinary Economic Circumstances Waiver 

For both the Substance Abuse Prevention and Treatment Block Grant (SABG) and the Mental 

Health Block Grant (MHBG) there is a process that allows for the consideration of a MOE 

waiver for any state that experiences extraordinary economic circumstances in a state fiscal year: 

Upon the request of a State, the Secretary may waive all or part of the requirement 

established in subsection (a) if the Secretary determines that extraordinary economic 

conditions exist in the State, or any part of the State, to justify the waiver. 

1930(c)(1), Public Health Service Act (42 USC 300x-30(c)(1))[SABG MOE waiver provision] 

The Secretary may, upon the request of a State, waive the requirement established in 

paragraph (1) in whole or in part if the Secretary determines that extraordinary economic 

conditions in the State in the fiscal year involved or in the previous fiscal year justify the 

waiver. 

Behavioral Health is Essential to Health • Prevention Works • Treatment is Effective • People Recover
 

 

 

 

 

Page 2 – State Authority for Mental and Substance Use Disorders 

1915(b)(3)(A), Public Health Service Act (42 USC 300x-4(b)(3)(A))[MHBG grant MOE waiver 

provision] 

The Interim Final Rule implementing subparts II and III, part B, title XIX of the Public Health 

Service Act defines extraordinary economic conditions as “[a] financial crisis in which the total 

tax revenue declines at least 1.5 percent AND either unemployment increases by at least 1 

percent, OR employment declines by at least 1.5 percent.” (45 CFR 96.134(b)). If your state 

believes that it will possibly qualify for an economic waiver please indicate this on your 2021 

block grant report on the appropriate MOE table. Once your project officer has reviewed your 

submission you will receive a letter explaining how to apply for a waiver. Waiver requests 

should be submitted in a formal letter to SAMHSA and should include: 1) a narrative explaining 

why the MOE was not met; 2) information from your state offices on 

employment/unemployment numbers; and 3) information on any changes to tax revenue from the 

previous year. Once your request is received, SAMHSA will verify the official state numbers 

utilizing records from the Bureau of Labor Statistics and information from the Census Bureau 

regarding total tax revenue to determine whether your state qualifies for a waiver. 

Public Health Emergency Waiver 

SAMHSA will also consider requests from states who do not meet the extraordinary economic 

conditions waiver requirements under 45 CFR 96.134(b). This process will be based on 

SAMHSA’s public health emergency (COVID-19) waiver authority under section 1957 of the 

Public Health Service Act (42 USC 300x-67), which provides in pertinent part: 

In the case of a public health emergency (as determined under section 319), the Secretary, 

on a State by State basis, may, as the circumstances of the emergency reasonably require 

and for the period of the emergency, grant an extension, or waive application deadlines or 

compliance with any other requirement, of a grant authorized under section 1911, or 

1921. 

If the waiver request is granted, you will receive formal notification. If the waiver is denied for 

any reason, you will have the option to request a determination of material compliance decision 

citing other factors that will be outlined in your early notification letter. 

Sincerely, 

Elinore F. McCance-Katz, M.D., Ph.D. 

Assistant Secretary for Mental Health and 

Substance Use 

Substance Abuse and Mental Health Services Administration 

1-877-SAMHSA-7 (1-877-726-4727) • 1-800-487-4889 (TDD) • www.samhsa.gov